Page 202 - SBR Integrated Workbook STUDENT S18-J19
P. 202
Chapter 13
Example 1
Temporary differences
The following relate to Hector for the year ended 31 December 20X3:
(a) Current liabilities include accrued expenses with a carrying amount of
$1,000. The related expense will be deducted for tax on a cash basis.
(b) Current assets include prepaid expenses with a carrying amount of
$2,000. The related expense has already been deducted for tax
purposes.
(c) Non-current assets include items property, plant and equipment that cost
$100,000 and have a carrying amount of $90,000. The tax written down
value is £60,000.
(d) Current liabilities include revenue received in advance, with a carrying
amount of $10,000. The revenue was taxed on a cash basis.
For each of the above, determine the carrying amount, the tax base and
whether it will give rise to a deferred tax asset or deferred tax liability.
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