When a depreciable asset is sold at a profit on an intragroup basis,a consolidation entry is required to recognise a deferred tax asset.

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When a depreciable asset is sold at a profit on an intragroup basis, it results in a temporary difference between the carrying amount and the tax base of the asset. This gives rise to a deferred tax liability. However, if the entity expects to recover the carrying amount of the asset through use or sale, it may recognise a deferred tax asset instead. A consolidation entry is required to recognise this deferred tax asset.

When a Depreciable Asset Is Sold at a Profit on an Intragroup