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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 4 years ago by Stephen Widberg.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • June 30, 2021 at 6:23 am #626669
    joynow
    Member
    • Topics: 42
    • Replies: 38
    • ☆☆

    Hi, Sir from Mar/Jun 2019 Q2 c)

    The directors of Hudson wish to recognise a material deferred tax asset in relation to $250 million of unused trading losses which have accumulated as at 31 December 20X2. Hudson has budgeted profits for $80 million for the year-ended 31 December 20X3. The directors have forecast that profits will grow by 20% each year for the next four years.The market is currently depressed and sales orders are at a lower level for the first quarter of 20X3 than they were forthe same period in any of the previous five years. Hudson operates under a tax jurisdiction which allows for trading losses to be only carried forward for a maximum of two years.

    Answer from third paragraph: The deferred tax asset is based upon forecasts for too long a period.

    Which year have they been using?

    June 30, 2021 at 5:22 pm #626718
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3428
    • ☆☆☆☆☆

    I am sorry – there is no point in cutting and pasting entire exam questions.

    You need to phrase the question in your own words – probably no more than 20.

    Finally – there is a house limit of 3 questions.

    Please refer to my online lecture

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Viewing 2 posts - 1 through 2 (of 2 total)
  • The topic ‘Deferred tax’ is closed to new replies.

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