Twiggy Ltd is engaged primarily in agricultural pursuits as well as in forestry products, including the management of its own forest reserves. Unfortunately, in the current year a major bushfire resulted in the destruction of 50 000 hectares of standing timber, harvested logs, forestry buildings and equipment. As a result, the company recognised a $100 million tax loss in the current period. The managers of Twiggy Ltd are debating whether they can recognise a deferred tax asset in the financial statements for the current period in relation to this tax loss.

Required 

Prepare a report to the managers of Twiggy Ltd providing advice on the recognition of a deferred tax asset with regards to the tax loss, specifying the conditions, if any, under which the asset could be recognised.