SECTION B Deferred Tax A friend came across the following note from an annual report of a company. He was curious as to the meaning of the terms "deferred tax assets" and "deductible temporary differences". Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which all the deductible temporary differences can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. Required: Advise your friend the rationale of accounting for deferred tax and use appropriate example(s) to illustrate the meaning of the terms "deferred tax assets" and "deductible temporary differences" I (word limit: 800 words)