Acca paper f7 financial reporting book
When an NCA is revalued to its current value within the financial statements, the revaluation surplus is recorded in equity (in a revaluation reserve) and windows 8 rtm key install reported as other comprehensive snagit 11 full crack mf income.
So, how does the above example result in tax being payable in the future?
In Paper F7, deferred tax normally results in a liability being recognised within the Statement of an avi player for mac Financial Position.
Since the revaluation surplus has been recognised within equity, to comply with matching, the tax charge on the surplus is also charged to equity.In accordance with the concept of prudence, a liability is therefore recorded equal to the expected tax payable.The questions are taken at random from a large bank of questions, so every time you attempt the exam you are likely to get different questions.The overall double entry is: Dr Tax expense in Income Statement 25 Dr Revaluation reserve in equity 375 Cr Deferred tax liability in SFP 400 THE paper P2 exam It is important to appreciate that deferred tax can arise.Example 4 At the reporting date, inventory which cost 10,000 has been written down to its net realisable value of 9,000.Therefore, to require discounting of deferred tax liabilities would result in a high degree of unreliability.
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The fair value adjustments may not alter the tax base of the net assets and hence a temporary difference may arise.Temporary differences are defined as being differences between the carrying amount of an asset (or liability) within the Statement of Financial Position and its tax base ie the amount at which the asset (or liability) is valued for tax purposes by the relevant tax authority.The closing figures are reported in the.However, it will be helpful to consider the effect on the statement of profit or loss.Therefore, for Paper P2 it is more important that students understand the principles behind deferred tax so that they can be applied to any given situation.Safra cardholders are eligible for an additional 5 discount on top of the 15 discount when they enroll for 2 papers.However, IAS 12 specifically excludes a deferred tax liability being recognised in respect of goodwill.It is important that you read the information carefully.To begin your studies, download our free Study Guide for acca Paper F7 and find out how to make use of OpenTuition to make sure that you pass!Tax will become payable on the surplus when the asset is sold and so the temporary difference is taxable.