Deferred Taxes

Question 1

What is the method used by IFRS on deferred taxes?

Answer 1

liability method

Question 2

Classification of deferred tax assets and deferred tax liabilities in the FS

Answer 2

CURRENT ONLY - NON CURRENT IS PROHIBITED

Question 3

Taxable temporary difference will result in

Answer 3

taxable income in the future

DEFERRED TAX LIABILITY
-when book NI is overstated

Question 4

Deductible temporary difference will result in

Answer 4

deductible income in thefuture

deferred tax asset
when book net income is understated

Question 5

Deferred tax asset in IFRS

Answer 5

VALUATION IS NOT ALLOWED

Only recognize a deferred tax asset if it is probable that the tax benefit can be used

• arises when there is temporary deductible difference
• and when an entity has unused tax losses that can be deducted in the future or tax credits that can be used in the future

Question 6

CODE

Answer 6

DA -deductible temporary difference is deferred asset

TL - taxable temporary difference is deferred liability

DA TL

Question 7

In IFRS, deferred taxes are classified STRICTLY AS

Answer 7

NON CURRENT ONLY!