Deferred tax (IAS 12) – Individual accounts – ACCA (SBR) lectures
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2?? Two separate rules (this is the exam key)
? For ASSETS
CA > TB ? Taxable temporary difference ? DTL
CA TB 6,000 ? DTL
? For LIABILITIES (IAS 37 provisions live here)
CA > TB ? Deductible temporary difference ? DTA
CA < TB ? Taxable temporary difference ? DTL
_______________________________________________
?????
Ask yourself one question:
“When this reverses, will I pay MORE tax or LESS tax?”
For provisions:
Expense recognised now
Tax deduction later
Future tax will be LESS
? Deferred tax asset
SORRY the FORMAT broken
2?? Two separate rules (this is the exam key)
? For ASSETS
CA > TB ? Taxable temporary difference ? DTL
CA TB 6,000 ? DTL
? For LIABILITIES (IAS 37 provisions live here)
CA > TB ? Deductible temporary difference ? DTA
CA < TB ? Taxable temporary difference ? DTL
why is the share based payment DTA.
Because the business will make a payment sometime in the future (most likely on the grant date) – costs / expenses to the business reduces your overall tax liability.
In the Kaplan book, they write the carrying value to be NIL (share based), and put the calculation into the tax base.
The difference is then taxed.
I’m finding this difference in methods confusing
You should get the same answer, so go with whichever one you prefer.
Siounds good !