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The balances in the Trial Balance are as at the year end – 31 Mar 2011. When calculating Deferred tax and Current Tax, why did you bring the balances down as brought forward balances?
Because those balances are the figures from the trial balance! It doesn’t necessarily mean that they are from exactly 12 months ago – they are simply the figures as at the end of the year BEFORE the year end adjustments are put through.
The figure for share capital is also as at the end of the year – was it not also the figure brought forward? Yes! But in that case, it has been brought forward from 12 months ago.
The deferred tax and current tax figures are simply the start point for us to begin to work out what is the tax CHARGE for the year or what is the tax PROVISION to carry forward onto this year’s balance sheet
OK?
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