DT Group

Hi,

I would kindly like your help on Q13 DT Group (BPP SBR Workbook Sep 2019 – Jun 2020) Page 751 in the Further Question Practice section.

In the question, note (v) states that:

“Income tax of $165 million on a property disposed of in 20X0 becomes payable on 30 November 20X4 under the deferral relief provisions of the tax laws of the country. There had been no sales or revaluations of property during the year to 30 November 20X1”.

In the answer (Page 788), they have divided $165m by 30% (the tax rate) to calculate the temporary difference.

Can you please explain why have they done so?

Also, in the last paragraph of the answer, where they commented on the effects on the financial statements, they deducted $3m from the $338.5m deferred tax liability they calculated and also from the opening balance of $280m of the deferred tax liability.

Can you please explain the reason for this?

Thanks