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LACDT and DTA

Discussion in 'SA2' started by dimitris13, Sep 11, 2019.

  1. dimitris13

    dimitris13 Ton up 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
     
  2. Em Francis

    Em Francis ActEd Tutor Staff Member


    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
     
    Aladinsane likes this.

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