PSAK 25 dan PSAK 46 Case Study

Case 1
Bellow are elements in the financial statements on which the director of ABC Building Limited
require advice:

• In 2016, ABC Building Limited acquired several properties as investment properties.

Since ABC has not adopted accounting policy in accounting for property as investment
properties before, the financial director considered such adoption is change in
accounting policy. ABC Building Limited has no investment property before 2016.
• In 2018, ABC Building Limited proposed to change to the cost model instead of fair
value model in accounting for its investment property in accordance with PSAK 13. Its
financial director considered whether ABC could make such changes and, if change
could be made, how ABC should account for the changes
• In 2020, ABC Building limited decided to make a change in estimate as to the duration
of depreciation of its building, increasing it from 20 to 30 years.
Please Discuss how the above items should be dealt with in the financial statements of ABC
Building Limited based on PSAK 25

Case 2
Part 1
XYZ Co. at the end of 2018, its first year of operations, prepared a reconciliation between
pretax financial income and taxable income as follows:

Pretax financial income € 750,000

Estimated expenses deductible for taxes when paid 1,200,000
Extra depreciation (1,350,000)
Taxable income € 600,000
Estimated warranty expense of €800,000 will be deductible in 2019, €300,000 in 2020, and
€100,000 in 2021. The use of the depreciable assets will result in taxable amounts of €450,000
in each of the next three years.
Instructions
(a) Prepare a table of future taxable and deductible amounts.
(b) Prepare the journal entry to record income tax expense, deferred income taxes, and
income taxes payable for 2018, assuming an income tax rate of 40% for all years.
Part 2
ABC Corp calculated that it had sustained a deferred tax asset of $450,000 in respect of a tax
loss and deductible temporary difference of $2.25 million but it had not recognised any such
asset in the balance sheet. During the year, a business was injected to the company by the
major shareholder and the company began to derive taxable profit to offset with the loss
brought forward.
Required:
1. Discuss the implication of the current development on ABC’s deferred tax asset.
2. Suggest journal entries to effect the implication in (1).
3. If the tax rate is increased to 30%, discuss and suggest journal entries.