- This topic has 1 reply, 2 voices, and was last updated 5 years ago by
.
- Posts
Hi,
I have noticed that in consolidation of profit and loss questions, while consolidated profit before tax changes due to adjustment to cost or revenue, income tax expense is not adjusted accordingly. Income taxes of parent and subsidiary are just added line by line no matter what happens to consolidated profit before tax. Typical example of this is past exam question 1 of December 2012.Should it be like that? Is it correct according to IFRS standards?
Hi,
Yes, this is the correct treatment. The tax computations are based on the individual accounts and so it doesn’t matter what we do to the group accounts the tax charges are still the same.
You will see in SBR that we can then actually adjust the tax expense for deferred tax on PUPs but that is beyond the FR syllabus.
Thanks
- You must be logged in to reply to this topic.