# Help needed on deferred tax movement calculation

Home Forums ACCA Forum P2 Corporate Reporting Forums Help needed on deferred tax movement calculation

This topic contains 2 replies, has 2 voices, and was last updated by  karmuks 1 year, 9 months ago. This post has been viewed 500 times

Viewing 3 posts - 1 through 3 (of 3 total)
• Author
Posts

• karmuks
Participant
• Topics: 16
• Replies: 71

HI, i cannot find how 0.6m deferred tax movement was calculated.

http://www.accaglobal.com/content/dam/acca/global/PDF-students/2012/p2int_2009_jun_q.pdf

http://www.accaglobal.com/content/dam/acca/global/PDF-students/2012/p2int_2009_jun_a.pdf

Its a first question, retained earning working. Calculation of post acquisition profits of Mixted. Please help me on this.

christine
Participant
• Topics: 0
• Replies: 13

In this Q, the FV of net asset of Mixted includes \$8m of increase in value of PPE, and \$6m more in 1Dec.. so total is \$14m surplus in FV of PPE.
depreciation charge is SL method with 7 years useful life, means that additional dep charge for PPE is \$14m/7yrs = \$2m..
the deferred tax liability arises (\$176m-\$166m)x30% = \$3m (This transaction adjusted at pre-acq RE)
but depreciation charge will decrease the deffered tax liability by \$2m x 30% = 0.6m
so the post RE of mixted will be added back 0.6m..

karmuks
Participant
• Topics: 16
• Replies: 71

Right, never would sort out this one. Now i get it. Something new for me. I was confused with that 30%. Did not know if its tax rate or NCI rate. Silly me . Thank you very much yuin87 for explaining.

Viewing 3 posts - 1 through 3 (of 3 total)

You must be logged in to reply to this topic.