IAS 12 - Income Taxes Flashcards
Objective of IAS 12
- To ensure that the appropriate amount of tax is disclosed in the financial statements of an
entity. - To prescribe the recognition, measurement and disclosure of income taxes.
Profit before Tax LESS Non- taxable income
-Dividends
- Income of a capital nature
Profit before TAX PLUS Income not included in net profit
-Recoupements
Profit before tax PLUS non- deductable expenses
- Expenses of a capital nature
- Expenses not incurred in the production of income
-Expenses incurred that produce income that is not taxable
-Depreciation
-Provisions
Profir before Tax LESS
- Wear and Tax
- Capital allowances
- Scrapping allowance
- other tax allowances
- expenses paid in advance.
Deferred tax liabilities
the amounts of income taxes payable in
future periods in respect of taxable temporary differences
Tax base
Tax ease of an asset or liability is the amount attributed to the asset cr lability for tax purposes.
Tax base of an asset
- Is the amount that will be deductible for tax purposes against any taxable economic benefits that will flow in when the entity recovers the CV of the asset.
- If those economic benefits will not be taxable / TB =CV
Tax base of a liability
The CV less any amount deductible for Tex in future periods with respect to revenue in advance, TB = CV - revenue not taxed in future therefore TB =0
Deferred tax assets
are amounts of income taxes recoverable in
future periods in respect of deductible temporary differences, carry
forward of unused tax losses and carry forward of unused tax credits
Accounting policy
1.1 Deferred tax
Deferred tax is provided on the comprehensive allocation basis, (1) on the temporary differences(1) between the carrying amount and tax base(1) of assets and liabilities.
Note of deferred tax
Calculate the taxable amount of all the calculated temporary differences.
