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defer tax

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › defer tax

  • This topic has 3 replies, 2 voices, and was last updated 5 months ago by Stephen Widberg.
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  • January 24, 2022 at 10:18 pm #647397
    humai
    • Topics: 710
    • Replies: 233
    • ☆☆☆☆

    Defer tax

    a) shall be measured based on tax rates that have been enacted or substantively enacted by end of reporting period

    OR

    b) shall be measured based on tax rates that are expected to apply to the period when the asset is realized or liability is settled based on info available by the end of reporting period?

    a) or b? which 1?

    January 25, 2022 at 12:32 pm #647435
    Stephen Widberg
    Moderator
    • Topics: 10
    • Replies: 2528
    • ☆☆☆☆☆

    (Source : IASplus)

    Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates/laws that have been enacted or substantively enacted by the end of the reporting period. [IAS 12.47] The measurement reflects the entity’s expectations, at the end of the reporting period, as to the manner in which the carrying amount of its assets and liabilities will be recovered or settled. [IAS 12.51]

    KEY POINT IS WHETHER TAX LAWS ENACTED – SO (A) IN YOUR ANSWER ABOVE

    To be honest (b) means just about the same as (a).

    🙂

    January 25, 2022 at 3:28 pm #647449
    humai
    • Topics: 710
    • Replies: 233
    • ☆☆☆☆

    And current tax is also measured based on tax rates that have been enacted or substantively enacted by end of reporting period?

    January 27, 2022 at 9:17 am #647581
    Stephen Widberg
    Moderator
    • Topics: 10
    • Replies: 2528
    • ☆☆☆☆☆

    Yes, that’s right.

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