Page 141 - Finac1 Test 1 slides

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

141