Chapter 31 Income Taxes Related standard: PAS 12 Income Taxes
Learning Competencies
• Explain why the profit presented in the financial
statements may be different from the taxable profit. • Determine the tax base of assets and liabilities. • Compute for income tax expense and current tax expense. • Compute for deferred tax assets and deferred tax liabilities.
FAR PART 2: Zeus Vernon B. Millan
FAR PART 2: Zeus Vernon B. Millan FAR PART 2: Zeus Vernon B. Millan FAR PART 2: Zeus Vernon B. Millan Deferred tax expense (benefit)
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FAR PART 2: Zeus Vernon B. Millan Interperiod and intraperiod tax allocation • Interperiod tax allocation relates to the recognition of deferred tax assets and deferred tax liabilities. It is concerned with the accounting for temporary differences.
• Intraperiod tax allocation relates to the allocation of income tax expense during the period to various items of income or other sources that brought about the tax. This is based on the notion – “the tax follows the income.” Income tax is allocated to the following: a. Profit or loss from continuing operations b. Profit or loss from discontinued operations c. Components of other comprehensive income d. Items recognized directly in retained earnings FAR PART 2: Zeus Vernon B. Millan CLASSROOM DISCUSSIONS & COMPUTATIONS PROBLEM 31-2: THEORY & COMPUTATIONAL