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Good morning, Sir
Sir, May I know the reasons why an income tax (IAS12) considered to be an accounting estimate (IAS 8)? Is it because the current tax and deferred tax involves a measurement uncertainty? Can I have a clarification on this?
Income tax = measurement uncertainty – because tax legislation is sometimes unclear and subject to interpretation
Deferred tax = less uncertainty – it’s an objective calculation – but I suppose you could argue that changes in future tax rates make measurement uncertainI would hope that your question is too theoretical for what is now a practical exam 🙂 🙂
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