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Sir, let us change the question a little bit. Let us suppose that the entity has bought a non current asset on 1st January, 2000. After use it for 2 years, the entity stopped to utilize it and remain it in its warehouse temporarily. The entity has intention to restart using that NCA afte some period of time.
My question is that
1) In this case, does the entity charge depreciation during the period when the entity does not use it?IN X company`s trial balance as at 31 dec 2015 there is a liability in respect of deferred tax of 38.4 m and current liability in respect of current tax of 5.4 m $.
During the year X companys taxable temporary timing differences increased by 20 m of which 12 m related to the revaluation of X companys property. the deferred tax related to this revaluation should be charged to the P/ L statement. The company income tax rate is 20 %.
No provision has yet been made for the income tax liability based on this years`s profit not including the revaluation mentioned above. The directors have estimated the liability to be in the region of 22.8 m
What will be the tax charge in the P/L statement for the year ended 31 dec 2015.?Can you write the solution of this problem step by step please?
it is said that Examples of investment property include:
a)A building owned by the reporting entity (or held by the entity under a finance lease) and leased out under an operating leasea building held b the entity under finance lease should not be recognised under non current asset in the SOFP? why it is said above that that building is investment property?
ok. i supposed we only deduct the amount of loss in revaluation from revaluation surplus, and so we are eligible to offset impairment loss with revaluation surplus balance. thank you
aa ok. now it is clear. understood. thank you for your comprehensive explanation..
if we say debit balance in tax account, this means that tax authority will refund this amount to the entity. (tax owes to company), am i right? the full example is as following:
A company’s trial balance at 31 December 20X3 shows a debit balance of $700,000 on current tax and a credit balance of $8,400,000 on deferred tax. The directors have estimated the provision for income tax for the year at $4.5 million and the required deferred tax provision is $5.6 million, $1.2 million of which relates to a property revaluation.
What is the profit or loss income tax charge for the year ended 31 December 20X3?In calculation tax charge, it is stated that debit balance 700 000 on current tax is prior year underprovision. why? is not this amount the excess over that would be paid to tax authority? mean this should be overprovision amount, should not it?
i have one more question. If Parent(P) has subsidiary (S) and accociate (A), and S gets profit of 1000 usd from selling to A. in this case if we prepare P s consolidated financial statements, we dont deduct that amount of profit from investment in associate as unrealised profit, but how about A gets that profit from sales to S? we would recognise that unrealised profit in investment in associate in the P s statement?
yeah i meant why? u already answered but why they decide so, i dont understand it.
statement of profit or loss? according to IAS 40, subsequent revaluations are recognized in the P/L statement, but as per IAS 16 we recognize subsequent revaluation in the Revaluation Surplus. am i right??
But if the entity calculates in the following year and witnesses that cost of revaluation (eg cost of experts) exceeds benefit. i mean if revaluation is usefulness, the entity does not have a chance return back again to cost model according to IFRS? how can entity do in such stiuation?
ok. However, if the entity does not want to suspend, wants to change depreciation method.(for example, Straight-line Depreciation.) is it true? can the entity do it and continue to charge depreciation?
1st question is clear. i am thankful for that. But in 2nd you say that having clock has benefits. in definition it is said economic benefit. what is ECONOMIC benefit of clock? if the office has a clock, which ECONOMIC benefit it will bring to entity?
i am sorry but i did not understand well. can u explain comprehensively? please explain me, why here it is said asset is recognised when It is probable (why not certain?) that the future economic benefits will flow to the entity? if it is so, if it is recognised when the inflow of benefit is probable, then we can say that contingent assets must be recognised. in the finan.statements. because in contingent assets the inflow of ec,benefit is probable too.
in the book of ACCA ( F7- Financial reporting). there is a sentence like this:
!) Item – Asset
2) Recognised in – The statement of financial
position3)When – It is probable that the future economic benefits will flow to the
entity and the asset has a cost or value that can be measured
reliably.and i ask you that it is true?
haa ok. now i understood completely. i did not pay attention to the date. thank you
but here it is not said customer returned back all goods, customer sent back half of goods, and baught another half. it means sales happened. is it not right?
