Playback Speed
Rectangle 2
IAS 12 Income Taxes (Part 1)
slide: Welcome
- Accounting profit (or loss)
-
The profit (or loss) for a period before deducting the tax expense.
- Current tax
-
The amount of income taxes payable (or recoverable) in respect of the taxable profit (tax loss) for a period.
i.e., Current tax = taxable profit (tax loss) x tax rate
It is the amount of tax due to or from the tax authorities for a period.
- Deductible temporary differences
-
Temporary differences that will result in amounts that are deductible in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled.
- Deferred tax assets
-
The amounts of income taxes recoverable in future periods in respect of:
• Deductible temporary differences;
• The carryforward of unused tax losses; and
• The carryforward of unused tax credits.
- Deferred tax liabilities
-
The amounts of income taxes payable in future periods in respect of taxable temporary differences.
- Tax base
-
The tax base of an asset or liability is the amount attributed to that asset or liability for tax purposes.
- Tax expense (income)
-
The aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.
i.e., Tax expense (income) = current tax + deferred tax
- Taxable profit (tax loss)
-
The profit (loss) for a period, determined in accordance with the rules established by the tax authorities, upon which income taxes are payable (recoverable).
This is the profit (loss), as calculated by the tax authorities, at the end of a financial period based on the income and expenses that are included or excluded for tax purposes (e.g., accounting depreciation versus tax depreciation).
- Taxable temporary differences
-
Temporary differences that will result in taxable amounts in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled.
- Temporary differences
-
Differences between the carrying amount of an asset or liability in the statement of financial position and its tax base. Temporary differences may be either:
• Taxable temporary differences; or
• Deductible temporary differences.