Understand the rules of income Taxes, and how these rules establish guidelines for accounting for income taxes, including income tax expense, classification of deferred tax accounts, and related disclosures. Case studies give you a practical look at how to account for different deferred tax scenarios. You will also receive a comparison of the accounting for income taxes under both GAAP and IFRS.
Register InterestLearning Objectives
When you complete this course, you will be able to:
- Recall the principles of deferred tax.
- Recall how to calculate income tax expense and deferred tax assets and liabilities.
- Identify steps necessary to determine if a valuation allowance is needed.
- Identify components of proper documentation of deferred income taxes in the work papers, as well as required disclosures within the financial statements.
Topics Discussed
- History, Development, and Objective of Deferred Taxation
- Introduction to tax effect accounting
- The new approach–the balance sheet liability method
- Income Taxes–summary of changes made to the original IAS 12
Tax Effect Arising From Revaluation of Property Plant and Equipment
- Practical tips: Tax effect requirement arising from the revaluation of non-depreciable freehold land and depreciable property, plant, and equipment
- Handling different accounting policies such as Cost Model, Revaluation Model, Fair Value Model
Recognition of Deferred Tax Assets and Liabilities
- Determining deductible temporary difference and taxable temporary difference
- Accounting for deferred tax liability and assets arising from initial recognition presentation and disclosure requirements
- Presenting deferred tax in profit and loss and other comprehensive income
- Presenting deferred tax assets and liabilities in the statement of financial position
- Accounting policies and explanatory notes
Understanding Accounting for Unused Tax Losses, Recognition of Deferred Tax Assets, and Their Related Disclosures
- Accounting for unused tax losses
- Dealing with recognition of deferred tax assets
- Explanation of the related disclosure requirements
Tax Effects Arising in Business Combinations & Group Accounting
- Tax-Controlled Transfer of Assets Between Related Companies
- The effect of deferred tax on business combinations
- Fair value adjustment and its impact on consolidated goodwill
- Elimination of unrealized profits
Dealing with Tax Effects of Tax Incentives
- Analysis of Tax Effects Arising on Issuance of Compound Financial Instruments
- Tax effects of compound financial instruments
- Practical tips: Tax effects of Redeemable Convertible Unsecured Loan stocks
Dealing with Other Complex Issues
- Changing Tax Rates for different periods
- Capital Allowance Restriction on Non-Commercial
- Vehicles, Hire Purchase, and Leasing
- Dealing with losses: Utilization of Tax Losses and Loss