The trial balance of Highwood Co at 31 March 20X6 showed credit balances of $800,000 on current tax and $2.6 million on deferred tax. A property was revalued during the year giving rise to deferred tax of $3.75 million. This has been included in the deferred tax provision of $6.75 million at 31 March 20X6. The income tax liability for the year ended 31 March 20X6 is estimated at $19.4 million. What will be shown as the income tax charge in the statement of profit or loss of Highwood at 31 March 20X6?
Why do we remove the revaluation deferred tax from the deferred tax provision, isn’t it credited to deferred tax provision? Help, this is making no sense