IAS 12 – Introduction – ACCA Financial Reporting (FR)
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Hello sir
How do we know if it’s a under or over provision if actual tax paid amount is not given? Because usually we get to know about it by comparing prior year tax liability and actual tax paid.
The idea is that last you provisioned some amount for tax and paid some tax and you still have $400 left on Credit side. So you don’t really need to know exactly how much you provisioned and paid last year, most important thing is that you have $400 provision left from last year (which means last year was overprovisioned)
when doing T account: CR is OVER priovision, DR is UNDER provision, CR is deduction from current year tax estimate, under is addition to current year estimate
Thanks
Hi, great lectures, many thanks!
On the example, should the trial balance CR of 400 be as at 31st March 2014 (not 2015) if it is a brought forward number?
Hey dear, would mind to help me on how to deal with statement of cash flow?
when you do provision at lets say 31/03/2014 you put ESTIMATE for the next year, so when you’re looking at 31/3/2015 this tells you this was estimate from last year 2014. This is because you need to wait whole 12 months to see how much tax you’re expected to pay for 2014 and only in 2015 you can adjust to over or under.