Deferred tax assets and liabilities arising from accrual of intragroup interest on loans should be offset as a consolidation adjustment.

Deferred tax assets and liabilities should not be offset as a consolidation adjustment unless they relate to taxes levied by the same taxation authority and the entity has the legal right to offset current tax assets against current tax liabilities. The accrual of intragroup interest on loans and the resulting deferred taxes are eliminated in consolidation, but the offsetting of deferred tax assets and liabilities follows specific tax legislation and accounting standards requirements, not merely because they arise from intragroup transactions.