In the year ended 30 June 2023 the profits of Warrang Ltd have declined compared to the previous year as sales have fallen. As a result, in the year ended 30 June 2024 the company had to retrench some of its employees as it endeavoured to streamline its business and search for new markets.

The company has always had a generous employee scheme whereby employees were entitled to good long service leave payments as well as payments in the event of redundancy. These expenses were recognised for financial reporting purposes on an annual basis but no tax deductions were allowed until cash payments were made. The company has raised deferred tax assets in relation to these items in its financial statements.

On retrenching its employees, Warrang Ltd has been able to claim tax deductions for the long service leave and retrenchment payouts. This has resulted in the company recording a tax loss in the year ended 30 June 2024.

Required 

Write a report to the group accountant of Warrang Ltd, covering your assessment of the company:

1. continuing to raise deferred tax assets in relation to long service leave and redundancy payouts 

2. raising a deferred tax asset in relation to the current period tax loss 3. raising any deferred tax liabilities such as for depreciation of the manufacturing machinery.