The following information is extracted from the financial statements of Tasty Road Bhd. at 31 December 2018.

Tasty Road Bhd.

Statements of Financial Position as at 31 December 2018

RM'000

Assets

Cash 3,700

Trade receivables 2,700

Interest receivable on investments 1,400

Inventory 4,000

Land 1,000

Plant (net) 1,400

Investment Property 600

Intangible assets (net) 2,000

Totals 16,800

Liabilities and shareholders' equity

Trade payables 2,960

Other payables 2,000

Loan 2,650

Accrued penalties 150

Deferred tax liability 290

Share capital 7,000

Retained earnings 1,750

Totals 16,800

The following information is given:

i. The trade receivables are disclosed after providing for general provision for doubtful debts of RM300,000. However, tax rules only allow specific bad debts.

ii. Interest receivables refer to interest from investment that is accrued on a time basis but it is taxable upon receipt. Additionally, included in the interest receivable is interest income on government bonds of RM400,000 that was tax exempt.

iii. For plant that has an expected useful life of 10 years, depreciation on a straight-line basis for 2018 was RM200,000. However, for tax purposes, capital allowances totalling up to RM800,000 was granted since the plant was acquired in the beginning of 2016..

iv. Retained earnings include fair value loss of RM80,000 arising from investment property carried at fair value. For tax purposes, the gains are taxed only at a point of sale. Original cost of the investment's property, incurred in 2017, was RM680,000.

v. During 2017, the company incurred RM3,000,000 in developing a patent whose useful life began only in 2018. For accounting purposes, the development cost was capitalized as an intangible asset that was amortized over a three-year period commencing in 2018. However, for tax purpose, the expenditures were deductible as and when incurred.

vi. Included in other payables is an accrual for compensation to be paid to employees amounted to RM500,000. It is allowed for taxation when the payment is made.

vii. The balance in the deferred tax liability account is the carried forward closing balances from the prior year.

Required:

a) Prepare a table showing the carrying amount, tax base and temporary differences for all the assets and liabilities in the given Statement of Financial Position. Assuming that the income tax rate for year 2018 is 25%, compute the deferred tax of Tasty Road Bhd. for the year ended 31 December 2018.

b) A tax loss arises when tax-deductible expenses exceed taxable revenues, resulting in a negative taxable income. No payment of tax needs to be made during the year a tax loss occurs. Yet, depending on the tax jurisdictions, companies are allowed to utilize their net losses to offset taxable income in other profitable years.

Identify and explain the TWO (2) options that company can use to utilize its tax losses.