Page 199 - SBR Integrated Workbook STUDENT S18-J19

Tax

Tax

1.1 Tax in the financial statements

The tax expense in the financial statements is made up of two elements

 Current tax – tax payable to authorities in relation to current year activities

 Deferred tax – an application of the accruals concept.

Tax expense = current tax +/– movement in deferred tax

1.2 Accounting for current tax

The accounting entry to record current tax is:

Dr Tax expense (P/L) X

Cr Tax payable (SFP) X

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