Page 50 - PowerPoint Presentation

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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