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Hi sir. hope u are well.
I have question regarding IAS 12.
what is the current tax account. and what is the difference between the tax current account and deferred Asset/liability account.also am a bit confused about the difference between over/under provision tax and deferred liability/asset tax accounts.
forward looking to your wonderful explanation sir.
thanks in advance.Hi,
Have you watched the videos and worked the examples in the class notes on the topic? Once you’ve done so then this should help you with your query. If you’re still struggling then please come back to me with more specific queries on where you are struggling.
Thanks
Hi Chris.
I have watched ur video lectorates, i have understood all of the main points of the chapter. but I do need to understand further about current tax account.
are there any accounting entries to transfer the current tax account figure to income tax expenses. or the current tax account is part of the debit or credit side of the income tax expenses.
in other words how to incorporate the current tax account to the income tax expenses.
Hi,
We use the current tax T-account to help us calculate the year-end liability and the current tax expense. It is effectively a hybrid account that covers both the SFP and the SPL. If you try to go further than this then you unnecessarily complicate things for the exam.
Thanks
Thank u very much chris. the reason am asking is just because i wanted to know the logic behind it to apply in the real life. thanks again for the wonderful explanation.
You’re welcome. It is done differently (correctly!) in real life where we have a separate SFP tax payable account and SPL tax expense account that are linked but I’d just ensure that you’re happy with our principles and then look at it in depth when you see it in a company set of accounts.
Thanks
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