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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › INCOME TAXES : IAS 12
Hello, thanks for your continued assistance. Some help here:
I have a carrying value of Inventories of $3million and the Fair value less costs to sale is $2.7million. losses are deductible in the fiscal year the inventory is sold. The tax rate is 30%. I want to come up with deferred tax.
In my opinion, I would think the carrying amount is $2.7million since the inventory is measured at the lower of cost and NRV. I would take the tax base of the inventory to be $3million since the loss is not currently allowed making the tax base to be higher. A deductible difference of $ 0.3million and a deferred tax asset of $0.09million ($0.3million *30%).
Am I right Mr. Tutor? Some help. Thanks
Hi,
Yes, you’re logic above is correct and very well thought through. Top work!
Thanks
Thanks OpenTuition Tutor