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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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