Tax Base Flashcards
Formula for Tax Base ( Assets)
Carrying Amount + Future amount deductible for tax purposes - Future Taxable economic benefits = Tax Base
Asset - Carrying Amount > Tax Base
Deferred Tax Liability
Liability - Carrying Amount > Tax Base
Deferred Tax Asset
Carrying Amount
The value of
asset when accumulated depreciation is deducted
Future amount deductible for tax purposes
Amt not deducted for tax
until it is received or paid. ATO not recognise, tax base = 0
Future Taxable economic benefits
carrying amount or amount when sold or used. no future taxable economic benefits if carrying amount taxed already, hence no further amount will be taxable in the future
Tax Base (liability)
Carrying Amount - future amount deductible for tax purposes + future taxable economic benefits = Tax Base
Liabilities
Revenue received in
advance, Accrued expenses, loan payable
Assets
Interest
receivable, account
receivables
Temporary
Difference
(Carrying Amount - Tax Base) x tax rate
Taxable
Temporary Difference
Deferred Tax
Liability, inc /dec in Income tax payable in future periods when carrying amt of asset / liability is recovered
Deductible Temporary Difference
deferred tax asset, leads to inc/ dec in income tax payable in future periods when carrying amount of asset / liability is recovered
Journal
Entry ( deferred tax asset )
DR Deferred Tax Asset
CR Income tax Expense (deferred)
Journal
Entry (Deferred Tax liability)
DR Income Tax expense[deferred)
CR Deferred tax liability
