Ann: Half Year Accounts, page-4

I expected a better reported NPAT, but I now realise that I did not understand the usual accounting treatment of taxation when there are tax losses. The $1,613,610 Tax in 1H2017 is notional (it will ot be paid to the ATO). The accounting entries seem to be, credit Deferred Tax asset by $1,613,610, and debit Tax by $1,613,610. There will be no following entry debiting the ATO and crediting cash.

Gross Profit .................. $5,378,701
Tax ............................... $1,613,610 .... 30%
NPAT ............................ $3,765,091

............................................ 1H2017.. ......... 2H2016
Deferred tax assets ....... $8,388,342 .... $10,001,952

I did not expect the results to be thus reported, but checking NWH today, it seems that is the normal accounting treatment. In the case of NWH, the results were distorted by NWH belatedly recognising further Deferred Tax assets, with the net effect of creating an Income Tax benefit of $2,131K in 1H2017. BYL probably has leeway to do something similar if it has not fully recognised Deferred Tax assets, because they are only recognised to the degree that there is a reasonable expectation that they will be able to be claimed in future profitable years.