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Hi tutor,
in (b)(i) share options, to calculate the temporary diff., tax base used is 16/2, why divide by 2?
Thank you
Hi,
It is because it is looking at the first year of the year year vesting period and so we are spreading it over these two years.
You must be using an old version of the materials as in BPP’s revision kit for SBR this is not question number 15, which leads me to think that you are therefore using an old CR revision kit. You need to be using an up to date SBR revision kit as there have been changes to the syllabus and the exam itself.
Thanks
question 59 of new BPP Revision kit
hi
my question is regarding carrying amount why it is zero at year one?
is it equity settled share based payment
40 million vest over two years
so 20 million goes to P & L and 20 stays in financial statements
why we are not taking difference between 20 and 8?
Share based pay and DT:
Tax rate x no of options expected to vest x 1/2 x intrinsic value of option = DT asset
I know it’s still in BPP kit but it’s an extremely ancient question!
so as per notes
carrying amount is equal to the intrinsic value of shares and tax base is zero. that give rise to deferred tax asset and in year 2 or later when option exercised we will get deduction from our current tax expense.
am I right?
That’s correct – I’m pretty sure they won’t ask you about the tax at exercise
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