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Dear Sir, can you please help me with the following question: Imagine the company’s accounting period is 01.01.2018-31.12.2018. Then at the year end the company makes a provision for income tax for that accounting period based on the accounting profit and applying the tax rate, and must include it in its SoFP. But how and when we separate that provided amount (income tax expense) between current tax liability and non-current deferred tax liability?
Hi,
The amount that you refer to is a current tax amount and is recognised in current liabilities as it will be paid within the next twelve months.
There is no deferred tax on this amount that has been provided. Deferred tax is a separate accounting adjustment and if you do not understand the difference then can I suggest that you watch the videos from chapter 15.
Thanks
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