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Good day Sir.
Sir, why is it that the taxable losses carried forward were not added back after tax was deducted.
Thank you Sir.Taxable losses reduce the taxable profits in later years – it is not a question of ‘adding back’ and is a standard tax rule from Paper TX (was was F6).
Good day Sir, but the tax loss of 4354 that was carried forward was later added back after tax in Question 1 June 2015.
Thank you Sir.It has not been treated any differently – it is just the layout of the answer that looks different because the tax workings have been done in the cash flow calculations instead of being shown separately.
To calculate the tax payable, the brought forward loss and been subtracted from the profit – as always, and as in the other question.
However the loss is not a cash flow (just as the TAD’s are not cash flows) and so because they have been shown in the cash flow statements they need adding back.
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