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i have too much problems in deferrad tax and income tax treatment in final accounts questions.. im really much distrubed bcx i dont exactly get what question indicating plx help me out
you only need to know
temporary difference = CV – tax base
deferred tax = income tax rate* temporary difference
only change in deferred tax is charged to I/S.(eg, last year deferred tax was 500 and this year it is 700, then 200 is charged to I/S)
deferred tax is usually treated as non current liability.
faixi, there are 7 examples of deferred tax calculations in the mini exercises at the back of the OT notes. You need to be careful when you read the question – sometimes Steve Scott tells you what the Income Tax liability is, sometimes he tells you the charge. Sometimes he tells you what the carry forward deferred tax provision requirement is and sometimes he tells you the temporary differences and the tax rate.
Work through the seven examples in the mini exercise – they are all lifted extracts from past exams. Having completed all 7, you should then be in a position to start thinking about giving lectures on the subject
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