Dear sir,
In the SBR lectures, the deferred tax for share based payments, I learned that, the carrying value of the share based payment will be the intrinsic value, and the tax base of the share based payment is always nil.
But in the question named panel, part (i), they took the intrinsic value as the tax base and carrying amount as nil. I'm confused, could you pleas help?
Also, why do they divide the intrinsic value by 2 I'm confused, kindly help if you can. Thank you
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Q Panel Deferred Tax
5y ago#1SBP
DT asset after one year of a two year plan = 1/2 x no of options expected to vest x intrinsic value x tax rate
Does that solve it? I wouldn't mention tax base - they just want to know what the DT asset is.
If it cheers you up, Panel was written when King Edward III was still King of England :)
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