How IAS 12 income taxes defines the tax base of assets and liabilities?
The tax base of an asset is the amount that will be deductible against taxable economic benefits from recovering the carrying amount of the asset. Where recovery of an asset will have no tax consequences, the tax base is equal to the carrying amount. [IAS 12.7]
When was DTA created?
Deferred tax liability is created only when the timing differences originate in the tax holiday period and reverse after the tax holiday. Adjustments are done on the basis of the FIFO method. *Fully reversed after the tax holiday period. The total DTL balance at the end of the second year will be 126,000.
What is the accounting treatment for income tax under Ind AS 12?
Ind AS 12 is based on the Balance Sheet approach. It requires recognising tax consequences of the difference between the carrying amounts of assets and liabilities and their tax base.
What is DTA tax?
Deferred Tax Liability (DTL) or Deferred Tax Asset (DTA) forms an important part of Financial Statements. This adjustment made at year-end closing of Books of Accounts affects the Income-tax outgo of the Business for that year as well as the years ahead.
Is bad debt a permanent or temporary difference?
Bad debt expense creates a temporary difference between accounting income and taxable income.
How is deferred income tax recognised in IAS 12?
Deferred income tax is recognised under IAS 12to account for differences between tax base of an asset or a liability and its carrying amount. Deferred income tax and current income tax comprise total tax expense in the income statement. Temporary differences Definition of temporary differences
How are tax credits defined in IAS 12?
Similarly as tax holidays, tax credits are not definedin IFRS, but we can simply say that they are sums that can be offset against tax liabilities. Accounting for tax credits is excluded from the scope of IAS 20Accounting for government grants and disclosure of government assistance. Therefore, we need to look to IAS 12 Income taxes.
What are the additional disclosure requirements in IAS 12.82?
Paragraph IAS 12.82 imposes additional disclosure requirements for entities that recognised deferred tax assets for unused tax losses and which had a tax loss in the current or preceding period in the same tax jurisdiction.
Which is an exception to the principle of IAS 12?
The general principle in IAS 12 is that a deferred tax liability is recognised for all taxable temporary differences. There are three exceptions to the requirement to recognise a deferred tax liability, as follows: liabilities arising from initial recognition of goodwill [IAS 12.15 (a)]