Walther Bradfield & Sons (WBS) has operations in several countries. In Sweden, WBS has a €10 million in deferred tax assets and €5 million in deferred tax liabilities. In Switzerland, WBS has €6 million in deferred tax assets and €3 million in deferred tax liabilities. Sweden and Switzerland have completely different tax laws. How will these be reported on the financial statements assuming that WBS has the legal right to offset current tax accounts?

Question

Quizplus · Accepted Answer

Deferred tax assets and liabilities can be offset if they arise in the same jurisdiction and the company has the legal right to offset them. In Sweden, the net DTA is €5 million (€10 million DTA - €5 million DTL), and in Switzerland, the net DTA is €3 million (€6 million DTA - €3 million DTL).

Walther Bradfield & Sons (WBS) Has Operations in Several Countries