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deferred tax

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › deferred tax

  • This topic has 7 replies, 2 voices, and was last updated 3 years ago by P2-D2.
Viewing 8 posts - 1 through 8 (of 8 total)
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  • October 24, 2019 at 2:17 pm #550672
    arunotes
    Member
    • Topics: 65
    • Replies: 39
    • ☆☆

    may i knw what is the reason behind when the carrying amt of liabilities more than tax base, it will be deferred tax assets?

    thankss

    October 24, 2019 at 4:34 pm #550705
    arunotes
    Member
    • Topics: 65
    • Replies: 39
    • ☆☆

    Also, sir, deferred tax assets and deferred tax liabilities usually will be Non current or current?

    October 26, 2019 at 9:20 am #550838
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6493
    • ☆☆☆☆☆

    @arunotes said:
    may i knw what is the reason behind when the carrying amt of liabilities more than tax base, it will be deferred tax assets?

    thankss

    Hi,

    If the carrying amount is greater than the tax base then we have a deferred tax liability and not a deferred tax asset, as you say. It will be a deferred tax liability as the tax base is lower due to the company claiming more capital allowances than depreciation charged. There will therefore be less capital allowances available in the future if we have claimed this amount of capital allowances already, and so we would therefore pay more tax in future as we get less of a deduction against taxable profits.

    Thanks

    October 26, 2019 at 9:20 am #550839
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6493
    • ☆☆☆☆☆

    @arunotes said:
    Also, sir, deferred tax assets and deferred tax liabilities usually will be Non current or current?

    Yes, they usually will be.

    Thanks

    October 27, 2019 at 3:19 am #550924
    arunotes
    Member
    • Topics: 65
    • Replies: 39
    • ☆☆

    I am referring to liabilitiy item rather than asset item such as warranty expense

    October 27, 2019 at 3:20 am #550925
    arunotes
    Member
    • Topics: 65
    • Replies: 39
    • ☆☆

    usually will be Non-current OR current??? how to identify the deferred tax asset/liability is current OR non-current?
    Thanks

    November 2, 2019 at 10:31 am #551428
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6493
    • ☆☆☆☆☆

    @arunotes said:
    usually will be Non-current OR current??? how to identify the deferred tax asset/liability is current OR non-current?
    Thanks

    It would depend on when it is settled.

    November 2, 2019 at 10:32 am #551429
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6493
    • ☆☆☆☆☆

    @arunotes said:
    I am referring to liabilitiy item rather than asset item such as warranty expense

    You would be saving tax in the future when the deduction is allowed, hence the deferred tax asset.

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