AC2101 S1 2014 Seminar 13 & 14 Deferred Tax (Anil).pptx

Underlying transactionevent 5 all of the above 6 none

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Unformatted text preview: ement, Presentation and Disclosure Issues 2 1 Clicker Question Deferred tax accounting is required because of… 1.  Concept of accrual accounting 2.  Matching principle 3.  Recovery(settlement) of asset(liability) changes future tax payable 4.  Underlying transaction/event 5.  All of the above 6.  None of the above 3 Permanent and Temporary Differences *  Recall from earlier, taxable income is ≠ accounting income. This is because of: *  Permanent differences *  Temporary differences *  Permanent differences arise from different definitions of revenue and expenses between accounting standards and tax rules. Some examples include: *  Accounting Revenue exempted from income tax (e.g. tax- exempt interest income) *  Accounting Expenses disallowed for income tax deduction (e.g. fines and penalties) 4 2 Permanent and Temporary Differences *  What about temporary differences (“TD”)? *  What gives rise to a TD in the case of entity AA Ltd in the...
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This document was uploaded on 02/10/2014.

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