Recognition of deferred tax assets

12.20 Recognition of deferred tax assets t LO5 Paddington Ltd incurred an accounting loss of $7560 for the year ended 30 June 2020. The cur- rent tax calculation determined that the company had incurred a tax loss of $12 500. Taxation legislation allows such losses to be carried forward and offset against future taxable profits. The company had the following temporary differences. 30 June 2020 30 June 2019 Expected period of reversal Deductible temporary differences: Accounts receivable S12000 5000 $10000 7500 2021 2021/2022 equaly Plant and equipment Taxable temporary differences: Interest receivable Prepaid insurance 1 500 10000 2500 20000 2021 2021 At 30 June 2019, Paddington Ltd had recognised a deferred tax liability of $6750 and a deferred tax asset of $5250 with respect to temporary differences existing at that date. No adjust- ment has yet been made for temporary differences existing at 30 June 2020. Required 1. Discuss the factors that Paddington Ltd should consider in determining the amount (if any) to be recognised for deferred tax assets at 30 June 2020. 2. Calculate the amount (if any) to be recognised for deferred tax assets at 30 June 2020. Justify your answer 104.5