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Deferred tax
Example 9.4
An item of PPE has a CV of £100k. At this time, its tax base is £80k due to
accelerated capital allowances for the year.
The asset is then revalued to its market value of £130k.
Required:
Assuming a tax rate of 28%, show the journal entries required to record
deferred tax, assuming no brought forward deferred tax balances exist
relating to this item of PPE.
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