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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › deferred tax
hi mike
thks for ur prev help
suppose we have deferred tax asset Dr Deferred tax asset and Cr Tax charge, and suppose now the asset has been sold and in what sense will we get tax relief and when will remove the deferred tax assset and what shall be the entries?
When you sell the asset, there will be a capital allowances calculation of a balancing allowance or a balancing charge and the resultant figure works its way into the tax computation (see F6 lectures)
Pon sale, and after the balancing allowance (or balancing charge) has been calculated, that asset and it’s associated deferred tax implications will no longer feature, neither in the TNCA figure nor in th edeferred tax calculations
There is no specific entry – its just that the carried forward figur ein the deferred tax account no longer takes into account the deferred tax implications of the revaluation of those particular revalued assets
OK?