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Hi Tutor,
In relation to the sub-q 6, could you please kindly explain the rationale behind this calculation:
Tax expenses of $13.2 (32.4 – 19.2), I would thought to simply put $32.4 as tax expenses for the year.
Thank you
Hi,
The tax expense through profit or loss cannot include the increase in the deferred tax due to the revaluation, as this will go through OCI to match up with the revlaution gain in OCI.
As the revaluation gain was 64 and the tax on it 19.2 then the 19.2 must be deducted from the total increase in the deferred tax liability, and hence the adjustment made above.
Thanks
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