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Deferred tax

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

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by P2-D2.
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    Posts
  • September 6, 2018 at 6:20 pm #471920
    rajvir1801
    Member
    • Topics: 19
    • Replies: 4
    • ☆

    Dear Sir,

    Please help me understand what does “recovering the carrying amount of the asset” mean in this definition:

    “The tax base of an asset is the amount that will be deductible against taxable economic benefits from recovering the carrying amount of the asset. Where recovery of an asset will have no tax consequences, the tax base is equal to the carrying amount.”

    Thank you.

    Regards,
    Rajvir Singh Oberai.

    September 7, 2018 at 8:36 pm #472208
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    It means that when we use the asset we generate more than it’s value through its usage. If not then we cannot claim the value of the asset for tax purposes.

    Thanks

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