Income Taxes Flashcards
What is accounting profit?
What is taxable profit?
What is current tax?
What are tax allowances the equivalent of?
What are taxes payable also known as?
What is depreciation in respect of tax?
Profit or loss for the period after deducting tax
Profit or loss on which tax is chargeable for the period (based on authorities)
Tax payable
An accounting item
Tax recoverable
A tax allowance
What is the double entry for current tax?
At the end of the year what is estimated?
Dr Tax Expense Cr Tax Liability
Tax payable
Under/ over provision
What is it incorporated in?
Proforma for how we include it?
Double entry for an over provision? And what amount
Next years tax charge
Current tax charge
+/- under/over provision
Total tax charge
Dr tax liability what you expected
Cr Bank what you pay
Cr Over provision difference
Dr Tax Liability expected
Cr Bank actual
Dr Tax Expense difference
Deferred Tax
What is a taxable temporary difference?
What is a deductible temporary difference?
Why do we not account for permanent differences?
What are temporary differences?
Deferred tax liability
Deferred tax asset
Because it is included in the profit but not the taxable profit
Included in profit and taxable profit but in different accounting periods
Deferred Tax
How do we work this out?
How do we work out tax chargeable?
How do we work out profit after tax?
CV v TB = difference x tax rate = temp difference
Profit before tax
- tax allowance
Taxable Profit
x Current tax rate
Profit after tax
Profit before tax
- depreciation
Taxable profit
PBT after Depreciation
- tax charge
PAT
What is the initial double entry?
How do we work out the movement in provision?
What is the double entry if this is an increase? Decrease?
What are provisions for deferred tax under in the SFP?
What remains the same regardless of deferred tax charge?
What is deferred tax not?
Dr Income Tax Expense
Cr Deferred Tax Provision
Closing provision
-Opening provision
Movement
Dr Income Tax Expense Cr Deferred Tax Provision
Dr Deferred Tax Provision Cr Tax Expense
NCL
Tax charge and profit after tax
A cashflow
How do we work out income tax to P/L?(total tax charge for the year)
When do we recognise deferred tax in OCI?
Current Tax Charge
Under/over provision
Movement
Total Tax Charge
When it relates to an item in the OCI
Revaluation
How do we work out the change?
What is your opening provision? And closing provision?
What is the double entry for this? And what amount?
Initial CV vs Tax Base = Diff x tax rate
Revaluation amount x tax rate
FV vs Tax Base = Diff x tax rate = closing taxable difference
Opening is the deferred from prev year
Closing worked out for current year
Dr Reval Reserve (revalued x tax rate)
Cr P/L (CV deferred tax - opening prov)
Dr Deferred Tax Liability movement
Deductible Temporary Difference
When is a provision recognised?
When may it be deductible?
What can losses be used for?
What happens with a deductible loss calculation?
When there is an obligation
When the expenditure is incurred
To set off against future profits
The profit available is used as the tax base at the amount of the cv and deferred tax asset
