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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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