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Deferred tax/ revaluation of asset

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Deferred tax/ revaluation of asset

  • This topic has 1 reply, 2 voices, and was last updated 5 years ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • June 3, 2020 at 12:38 pm #572656
    fieldsama
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    Hi tutor,

    I am a bit confused with a temporary difference, im not sure of my answer

    So we have a machine, carrying value 100k, on 31.12.20×0 and the fair value is 150k. Revaluation model is applied.
    Income tax is 30%
    The remaining useful life is 10 years.

    So for me the diff is 45k
    Because under ifrs 150k – 15k ( depreciation 150/10) = 135k

    Under tax rules 100k – 10k ( 100k/10) = 90

    Tempo diff = 135 – 90 = 45k is this correct ?

    I also thought of simply putting 150-100 but then again we have depreciation expense.

    Im so confused, i appreciate any help
    Thank you

    June 4, 2020 at 10:51 am #572846
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7171
    • ☆☆☆☆☆

    Hi,

    You have the carrying value of the asset correct but you need more information to calculate the tax base. What is the tax depreciation? This is applied to the original cost and is not adjusted for any revaluation to fair value.

    Thanks

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