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LACDT and DTA

D

dimitris13

Member
Hi,

i have the following question.
lacdt is applied as a decrease in scr.
however i read in a previous thread that it may also affect DTA or dtl?
is this the case and if yes how ?
thanks
 
dimitris13 said:
Hi,

i have the following question.
lacdt is applied as a decrease in scr.
however i read in a previous thread that it may also affect DTA or dtl?
is this the case and if yes how ?
thanks
Click to expand...


Hi
You are right it is a reduction to the SCR; made to reflect that in a stressed condition there could be a fall in current tax liabilities or, if the tax has already been paid, an increase in any deferred tax asset.
The balance sheet is stressed and the impact on any tax figures is determined. The adjustment is then the difference between the stressed balance sheet (without allowing for tax impact) and the stressed balance sheet, allowing for tax impact.

You may find the following thread useful:
https://www.acted.co.uk/forums/inde...pacity-of-deferred-tax-chapter-8-pg-12.15475/

Thanks
Em
 
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