Taxable loss carryforward without valuation allowance (IFRS) In 2014, its first year of operations, Hampshire Inc.reported a $500,000 loss for tax purposes. However, in 2015, Hampshire reported $200,000 taxable income.The tax rate is 30%, and is likely to remain at this rate for the foreseeable future.Hampshire reports under IFRS. Assume that, at the end of 2014, because it is a new company, Hampshire's management thought that it was probable that the loss carryforward would not be realized in the near future. However, by the end of 2015, management feels it is now probable that there will be future taxable incomes against which the 2014 loss could be applied. Instructions
a.What entries (if any)would be prepared in 2014 to record the loss carryforward?
b.What entries (if any)would be prepared in 2015 to record current and deferred taxes and to
recognize the loss carryforward?

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The Answer of Taxable loss carryforward without valuation allowance (IFRS) In 2014, its first year of operations, Hampshire Inc.reported a $500,000 loss for tax purposes. However, in 2015, Hampshire reported $200,000 taxable income.The tax rate is 30%, and is likely to remain at this rate for the foreseeable future.Hampshire reports under IFRS. Assume that, at the end of 2014, because it is a new company, Hampshire's management thought that it was probable that the loss carryforward would not be realized in the near future. However, by the end of 2015, management feels it is now probable that there will be future taxable incomes against which the 2014 loss could be applied. Instructions
a.What entries (if any)would be prepared in 2014 to record the loss carryforward?
b.What entries (if any)would be prepared in 2015 to record current and deferred taxes and to
recognize the loss carryforward?

Taxable Loss Carryforward Without Valuation Allowance (IFRS) in 2014, Its