C7 IAS12 Income Taxes

Question 1

Deferred tax: measurement

Answer 1

Deferred Tax assets and liabilities are measured at
the tax rates expected to apply to the period when
the asset is realized or liability settled,
based on tax rates that have been enacted by the end of the reporting period.

If Tax rates change, the tax rates expected when the temporary differences will reverse us used.

Should not be discounted.

Question 2

Deferred tax recognition

Answer 2

Deferred tax liability or asset is recognized for all taxable and deductible temporary differences, unless they arise from:

1. The initial recognition of goodwill
2. The initial recognition of an asset or liability in a transaction which:
   - Is not a business combination
   - at the time of transaction, affects neither accounting profit nor taxable profit.

Question 3

Current tax

Answer 3

Is the amount actually payable to the tax authorities for n relation to the trading activities of the entity during the period

Question 4

Deferred tax

Answer 4

Is an accounting measure, used to match the tax effects of transactions with their accounting effect

Question 5

Tax base

Answer 5

Tax base if an asset or liability is the amount attributed to that asset or liability for tax purposes