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Hi sir, only a revaluation gain will give rise to defered tax right ? A revaluation loss will not give rise to defered tax right ?
I don’t remember this aspect ever being asked neither at F7 nor at P2!
Where an asset has previously been revalued upwards, a deferred tax liability is created and this is reflected in the deferred tax liability balance carried down at the end of each year
Where that asset is subsequently revalued downwards, the deferred tax liability to carry forward in the deferred tax account is re-calculated and will influence the balancing figure in that account … and, of course, you remember that that balancing figure is double entered to the current tax account
So, to answer your question, there is no separate entry in the deferred tax account to reflect the deferred tax implications of a downwards revaluation, but the carry forward figure is adjusted / re-calculated and that re-calculation IS affected by the downwards revaluation
OK?
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