Artículo 40. IAS 12 Paragraph 40

As a parent controls the dividend policy of its subsidiary, it is able to control the timing of the reversal of temporary differences associated with that investment (including the temporary differences arising not only from undistributed profits but also from any foreign exchange translation differences [ Refer: IAS 21 ] ). Furthermore, it would often be impracticable to determine the amount of income taxes [ Refer: paragraph 2 ] that would be payable when the temporary difference reverses. Therefore, when the parent has determined that those profits will not be distributed in the foreseeable future the parent does not recognise a deferred tax liability . The same considerations apply to investments in branches.