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Deferred tax on share based payment arises only when shares are exercised thus we need to calculate a deferred tax based on the intrinsic value and it usually results in a Deferred Tax Asset (DTA), am i right?
Is the calculated value(ie. the instrinsic value used amount) is it the tax base or the carrying amount used in the deferred tax calculation??
in the kaplan study text they have classified it as the tax base and assumed the carrying amount to be nil
but shouldnt it be the carrying amount being the calculated amount (ie. the instrinsic value used amount) and the tax base to be nil , only then it would give rise to a DTA??
Hi,
Yes the deferred tax is calculated on the intrinsic value, which we use in the calculation of tax base for deferred tax purposes.
Thanks
Thanks
but my question is
is the calculated value(ie. the intrinsic value used amount) is it the TAX BASE or the CARRYING AMOUNT used in the deferred tax calculation??
Hi,
We use it as the carrying value as the tax base is nil given the tax authority do not recognise anything until the payment is made.
Thanks
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