- May 5, 2021 at 4:28 pm #619779lewisrobMember
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The tax expense amount recognised in the statement of profit or loss is usually different from the tax paid which appears in the statement of cash flows.
The amount of tax payable in the statement of financial position is usually different to the tax expense recognised in the statement of profit or loss.
A deferred tax balance can be either an asset or a liability
An under-estimate of tax in the previous year is corrected by decreasing opening retained earnings in the statement of changes in equity.
Are all of those corect or i am out of mind?May 6, 2021 at 6:55 am #619809John MoffatKeymaster
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The tax expense for the year will only be calculated at the end of the year and will be actually paid in the following year.
The expense in the SOPL is the tax for the year. The amount owing will be a liability in the SOFP.
For Paper FA, if tax was under-estimated in the previous year, then the amount under-estimated is added to the expense for the current year.
Deferred tax is not examinable in Paper FA.
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