Ann: AFL delivers improved performance & a profitable Q3 FY23, page-9

dropside - correct. And the write down of goodwill will not give rise to a tax loss. In this regard, the loss before tax as per page 11 of the half year 31 Dec 22 accounts was $8,528,100. The prima facie tax benefit for the loss would be $2.125m (25% of 8.5mm) if the write down and impairments gave rise to tax losses. However, the actual tax benefit was $464,886 which indicates that only $1.8m is a tax loss.

It is possible to work out if there are any tax losses carried forward in the company by looking at the tax notes in the accounts and working out the deferred tax assets and liabilities and cash paid. It should be noted that the rate losses can be used are dependent on such things as the "available fraction" which arises when an entity joins a consolidated tax group*. Also the cash flow statement shows "tax paid" for both FY 22 and Half Year ending 31 Dec - which indicates that there are no or limited tax losses that can be used. There is no disclosure of any franking account balances in the last two annual reports which would also indicate if tax is being paid (even by Withalls and passed up by a franked dividend).

And losses in AFL can't be transferred or used by Withnalls as Withnalls is not 100% owned.

In summary, tax lossess are hard to calculate (or even guestimate) and if even they could be their usage rate could be compromised by such things as the "available fraction". Hence I would assume that there are limited tax losses available and in any event, tax paid would give rise to franking credits which (hopefully) will be distributed to shareholders when (hopefully) a dividend is paid.

Hope the above helps (or at least outlines why the tax position is complicated and confusing.....)

*From the ATO webpage below. Note the consolidation reference manual is only 1,446 pages and hasn't been updated since 2011.... good luck

Download the entire manual

The entire Consolidation reference manual (current up to 15 July 2011) can be downloaded as a single portable document format (PDF) file. It includes automated links in the table of contents and cross-references.

The latest version of the entire manual was created on 15 July 2011 and is no longer current.

Next step:

• Download the entire 15 July 2011 version of the Consolidation reference manual (PDF, 9.8MB)This link will download a file (1,446 pages).

Best BSP

NFA, DYOR, GLTAH