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CAN SOME TELL ME THE DIFFERENCE BETWEEN INCOME STATEMENT APPROACH AND BALANCE SHEET APPROACH (WITH NUMERICAL EXAMPLE IF POSSIBLE)?
PLEASE TELL ME AS SOON AS POSSIBLE.
In what context? This sounds like a P7 Advanced Audit and Assurance question
Extremely Sorry , i forgot to mention IAS 12 (Income Tax),Timing difference, normally focusing on Income statement & temporary difference on statement of financial position.
Timing difference computes the direct difference between Taxable profit, and Accounting profit, and provides deferred tax direcltly.
While this lacks the detailed disclosures, there are no clear exposures as to why that difference actually arise.
An alternative and recommended approach is to provide deferred tax to temporary difference, which is calculated from the difference between the Carrying value and Tax base of the Assets and Liabilites, which helps to clearly mention the allowable and disallowed treatments by HMRC and Accounting policies.
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