Revaluation Gains at S.F.P

Net $80 but with a full explanatory disclosure note

But, then, the tax expense of ($20.000) would be included at S.F.P (under Equity) twice, one time at the retained earnings calculation, and one more at the Revaluation surplus (OCE) , Right?

In the same way that depreciation is shown twice - once as a deduction in arriving at net book value and again as a deduction in arriving at retained earnings! That tax about which you are concerned ... it's a deduction from the revaluation surplus and it's a decrease in the tax charge Let's revalue the asset by $100, say we have a balance brought forward of $850 on the deferred tax account, carrying values of other TNCA exceed tax values by $4,500 (not including that revalued asset) an estimated tax liability based on profits for the year of $620 and a tax rate of 20% Open 4 T Accounts - Deferred Tax (DT) Current Tax (CT) TNCA and Revaluation Reserve (RR) Put in the credit side of DT the amount brought forward $850 and in the debit side the amount carried forward $900 (20% x $4,500) In CT put in the debit side the amount of this year's estimated liability carried forward $620 Revalue the asset Dr TNCA $100 Cr RR $100 Account for the deferred tax on the asset Dr RR $20 and Credit DT $20 In DT carry down this extra deferred tax liability of $20 from debit side above the line to credit side below the line Balance off the DT account and take the balance to CT account Dr CT $50 Cr DT $50 Balance off CT to SoPorL $670 Balances now are: TNCA +$100 RR $80 DT $920 CT $620 Is that any better?

Thanks a lot for that explaination, it is understood, but i still have one inquiry : As it is known that the movement (difference) in both of tax provisions, and deferred tax brought forward & carried forward balances, represents the tax expense for the year . So, for calculating the tax expense it should be between (accumulated) balances . But, i always find at the questions the following statements : - an estimated tax liability based on profits for the year of $ 000 (above mentioned) . - a Provision for year ended is $ . - a provision of $ is required for current income tax on the profit of the year to 30 September 2014. all of them mean, they are attributable for the last year , not accumulated balance . Am i right ? Thanks

This is the information that you need to carry down the figure that is given "– an estimated tax liability based on profits for the year of $ 18,200 means the same as – the provision for year ended is $18,200 is the same as – a provision of $18,200 is required for current income tax on the profit of the year to 30 September 2014 is the same as - the estimated liability for current tax based on the profits for the year is $18,200" Just different ways of saying the same thing