Page 52 - Finac1 Test 1 slides - 5. Income Taxes (IAS 12)

INCOME TAXES

Steps in calculating basic deferred tax

• Calculate the temporary difference

• Difference between CA and TB

• Determine the applicable tax rate

• Must reflect the manner in which the CA is expected to be
recovered

• Use

• Normally 28%
• Sale
• 28% - Recoupment from tax base up to cost
• 22.4 – Carrying Value in excess of base cost

• Consider impact of capital losses carried forward from previous periods
• Mixed recovery – use and sale
• Evidenced by residual value

• Will use and then sell at residual value
• IAS 16 revalued non-depreciable assets land

• Assumed recovery through sale
• Investment property at fair value

• Rebuttable presumption: recovered through sale

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