![]() ![]() Then you charged tax depreciation of 10 000 CU – or in other words, you deducted 10 000 CU to arrive at taxable profit. If you take action today and subscribe to the IFRS Kit, you’ll get it at discount! Click here to check it out! Have you already checked out the IFRS Kit ? It’s a full IFRS learning package with more than 40 hours of private video tutorials, more than 140 IFRS case studies solved in Excel, more than 180 pages of handouts and many bonuses included. Then you charged depreciation and at the end of the year its carrying amount is 95 000 CU. Let’s say you bought a building with cost of 100 000 CU. Illustration: Different expected recovery of an asset In other words, when you operate in a country that charges different tax rates on capital gains and on profit, then you really need to examine what you are going to do with your asset. IAS 12 Income tax says in the article 51 that the deferred tax should be measured by the reference to the tax consequences that would follow from the manner in which the entity expects, at the end of the reporting period, to recover or settle the carrying amount of the asset or a liability to which it relates. Let’s take a look at IAS 12 Income taxes for some guidance. How to calculate deferred tax in this case? ![]() What about the situation when we use the asset for some time, charge depreciation and then we sell it on profit? Thus we apply two different rates. I understand that when I only buy asset for sale, I make deferred tax at 30% and when we plan to use the asset without selling it, we calculate deferred tax at 25%. But when we do not sell it, but use it, we charge depreciation and pay tax on profit of roughly 25%. When we sell the building on profit, we have to pay capital gain tax on property of 30%. In a country where I work there are two different rates related to buildings. ![]() I work in a country with more than one tax rates and I have issues with the correct calculation of our deferred taxes. Show notes IFRS Question 038: How to calculate deferred tax when different tax rates apply to the recovery of the same asset? ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |