Deferred tax recognition: timing differences create deferred tax; assets require prudence and virtual certainty for recognition. Deferred tax arises from timing differences between accounting income and taxable income and must be recognised for all such differences; permanent differences do not give rise to deferred tax. Deferred tax assets are recognised only to the extent there is reasonable certainty of realisation, and where unabsorbed depreciation or carry-forward losses exist, recognition requires virtual certainty supported by convincing evidence. Measurement uses enacted or substantively enacted tax rates, deferred tax is not discounted, and balances are re-assessed each balance sheet date with specified presentation and disclosure requirements.