[vanluka]

Dear Mike,

You have been extremely helpful, thank you so much. Yes, the drive on the left and crash on the right has been very useful, thank you so much! Love this website a lot!

Regards

[vanluka]

Dear Mike, thank you so much for the explanation. I tried to watch the video for the past exams, however, I am having great difficulties as T account never appear in my life before, I just realized that debit is on the left side and credit is on the right side. I understand that since provision for tax is on the right side, it is a negative 2700, so I understand until tax carried forward is $4200.

What I dont understand is why the transferred from revaluation reserve is a negative $2400? Do I take it as given that whenever I have a revaluation gain tax, I have the minus it off again from the tax payable?

[vanluka]

Hi Mike,

I am still confused. Here is the answer from ACCA:

Deferred tax
Provision at 30 Sep 2011($4500+$2400)………….6,900
Provision at 1 Oct 2010…………………………………(2,700)
Increase required………………………………………….4,200
Transferred from revaluation reserve……………..(2,400)
Balance:charge to income statement………………1,800

I am not sure why do we have to minus the transfer from revaluation reserve of $2,400. This makes the tax cheaper for the company to pay, in the first place, revaluation gain is table, this is logical, but why reduce the same $2400 again?

[Author]

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