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P2-D2.
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thezadzzz
- Topics: 25
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Hi,
Extract from Vernon Co:
(iv) “During the year, Vernon Co revalued its head office for the first time, resulting in an
increase in value of $12m at 31 December 20X8. Deferred tax is applicable to this gain
at 25%.”Why is the deferred tax charge on the revaluation gain ($12m x 25% = $3m) not deducted within “tax expense” on the P&L. It has only been deducted under OCI.
P2-D2
- Topics: 4
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Hi,
This is because any tax on the increase in value matches up to where the increase in value has been posted, i.e. other comprehensive income.
Thanks
thezadzzz
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