Que 46 BPP- Panel

As I'm sure you know this is an ancient question! What you need to know is that the tax credit in the P&L (cumulative) cannot exceed tax rate x cumulative share based pay expense. Cumulative SBP = 40 @30% = 12 Tax credit taken last year = 2.4 So (ignoring exercise) I would Dr DTA 11.4 Cr P&L (12-2.4) 9.6 Cr Equity - balance Don't worry about the exercise - I always cross it out when I use this question

On the exercise of an option the deferred tax will be transferred to current tax Unfortunately BPP have taken this question out of the kit now because it is so unrepresentative of the current style of the exam but I am convinced from memory that my numbers are right You could watch a debrief of this question if you follow this link https://www.youtube.com/watch?v=vsb6Wb0zMjE Please always remember that in the new syllabus there are very few marks available for calculation .