MAA363 Lecture Notes - Lecture 6: Annual Leave, Book Value, Deferral
Document Summary
Week 6: accounting for income taxes (deferred tax) E. g. non-deductable expenses e. g. unpaid maintenance fee of. 20 dollars taxable profit is greater than accounting profit. Hence current tax in 2016 is higher. Even though the expense is not deductible now but it wil be in the future. Hence future tax payments wll be lower. This gives rise to deferred tax asset in the current period. Dta = 20 x 30% = 6 dollars. Deferred tax liability = amount of income tax payable in future periods in respect of taxable temporary differences. Deferred tax assets = amounts of income taxes recoverable in future periods in respect of deductible temporary differences, the carry forward of unused tax losses and unused tax credits. Tax expense = the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax. Taxable profit = 1000 200 = 800. Tax payable = 800 x 30% = 240.
