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364 Triage Kaplan Deferred Tax

NNatalia6y ago
Hello Im really stuck with understanding calculation of deferred tax in q 364. The question says clearly that revaluation of property will give rise to deferred tax but then in the answer this deferred is included to arrive at 'increase in provision' to be later deducted?? Why did they deduct def tax on revaluation of land and buildings? Please kindly help
NNatalia6y ago#1
can anyone help?
P2-D2P2-D2Tutor6y ago#2
The revaluation gives rise to a further increase in the deferred tax liability, as we will be paying more tax on disposal of the property in the future. The additional increase on the revaluation will go through OCI to match up to the revaluation gain, and it does not go through profit or loss. It sounds like the deduction is the amount that is removed from the overall increase that would normally go through profit or loss and now goes through OCI. Thanks
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