IAS 12

Question 1

What is current tax?

Answer 1

Amonut of income taxes payable (recoverable) in respect of taxable profit (tax loss) for a period

Question 2

How should current tax be recognised?

Answer 2

Year-end estimate of tax payable

Question 3

How is the income tax expense through SPL adjusted?

Answer 3

For any under/over provision from prior year

Question 4

What is tax payable in SFP?

Answer 4

A current liability

Question 5

What is deferred tax in SFP?

Answer 5

A non-current liability

Question 6

What does the income tax expense represent?

Answer 6

Made up of current tax expense and deferred tax expense

Question 7

Tax payable in SFP?

Answer 7

Year end estimate, copied from additional information. Easy marks

Question 8

Provision for current tax? Action

Answer 8

Put immediately in SFP

Question 9

Calculate income tax for SPL?

Answer 9

Provision for current tax - under/over provision of tax liability

Question 10

Credit in current tax?

Answer 10

An over-provision

Question 11

Debit in current tax?

Answer 11

An under-provision

Question 12

What is deferred tax?

Answer 12

Estimate future tax consequences of transactions and events in FSs of current and previous periods

Question 13

What is deferred tax not?

Answer 13

A tax payable to the government

Question 14

What does deferred tax resolve?

Answer 14

Accounting profits not being equal to taxable profits

Question 15

What is a permanent difference?

Answer 15

One off difference between accounting and taxable profits caused by certain items not being taxable/allowable

Question 16

Do permanent differences have deferred tax?

Answer 16

No

Question 17

What is a temporary difference?

Answer 17

Difference between accounting and tax treatment this year

Question 18

Examples of a temporary difference?

Answer 18

Difference between depreciation and capital allowances
Overseas dividend income

Question 19

1st step in calculating deferred tax?

Answer 19

Calculate temporary difference (If not given)

Question 20

How to calculate tax base?

Answer 20

Cost - accumulated tax depreciation

Question 21

2nd step in calculating deferred tax?

Answer 21

Deferred tax position

Question 22

Calculation for deferred tax position?

Answer 22

Temporary difference * tax rate (SFP)

Question 23

3rd step in calculating deferred tax?

Answer 23

Whether it’s deferred asset or a deferred liability

Question 24

What is a deferred asset?

Answer 24

Carrying value < Tax base

Question 25

What is a tax deferred liability?

Answer 25

Carrying value > Tax base

Question 26

What can a deferred liability also be called?

Answer 26

A taxable temporary difference

Question 27

4th step in calculating deferred tax?

Answer 27

Calculate movement in deferred tax position

Question 28

Where does movement go?

Answer 28

In SPL

Question 29

If there is an increase in movement of deferred tax?

Answer 29

Debit: Income tax expense (SPL)
Credit: Deferred tax provision

Question 30

If there is a decrease in movement of deferred tax?

Answer 30

Debit: Deferred tax
Credit: Income tax expense (SPL)

Question 31

Revaluation gain?

Answer 31

FV - CV

Question 32

Total tax charge?

Answer 32

Deferred tax (20X1) + taxation (20X1) + tax charge in ending year (20X2) - Deferred tax (20X2) + taxation (20X2)

Question 33

Debit balance on current tax?

Answer 33

Is an under-provision, a positive value

Question 34

Credit balance on deferred tax provision?

Answer 34

Deducted

Question 35

What is a tax provision?

Answer 35

An estimate of the future tax liability that a company expects to incur.

Question 36

Tax base calculation?

Answer 36

Cost of asset - tax allowances at %

Question 37

Credit balance on current tax?

Answer 37

Is an over-provision, a negative value

Question 38

Overprovision in current tax?

Answer 38

Deducted

Question 39

underprovision in current tax?

Answer 39

Added

Question 40

Deferred tax provision which includes revaluation

Answer 40

Decreased

Question 41

Revaluation surplus?

Answer 41

Added to provision

Question 42

Tax charge for current year and debit/credit balance for current tax?

Answer 42

Included in the same working

Question 43

Provision for income tax for the year? Another term for

Answer 43

Another term for current tax

Question 44

Movement of deferred tax?

Answer 44

Deferred tax credit balance - deferred tax provision

Question 45

Total depreciation for the year?

Answer 45

Claimed depreciation for the year - charged depreciation in FSs

Question 46

Are proceeds incldued in reducing balance method?

Answer 46

No

Question 47

Another term for deferred tax position

Answer 47

Closing deferred tax provision

Question 48

Carrying value > tax base

Answer 48

Deferred tax liability. Taxable temporary difference

Question 49

Tax closing position (closing deferred tax provision)

Answer 49

SFP

Question 50

Tax movement

Answer 50

SPL

Question 51

Movement increase in deferred tax? (Deferred tax liability)

Answer 51

Debit: Tax expense (SPL)
Credit: Deferred tax provision

Question 52

Movement decrease in deferred tax? (Deferred tax asset)

Answer 52

Debit: Deferred tax
Credit: Tax expense (SPL)

Question 53

What can tax base also be known as?

Answer 53

Tax written down value

Question 54

Credit to deferred tax account/

Answer 54

Interest receivable
Prepaid expenses