Question Tag: Deferred Tax

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AT – Nov 2024 – L3 – Q2b – Tax Implications of 100% Acquisition in Mining Operations

Explain the tax implications of a 100% acquisition and compute the gains from the acquisition.

Question

Tongo LTD (Tongo) is a mining company operating in the Upper East Region of Ghana. The following relates to the operations of Tongo for the 2023 year of assessment:

Description	GH¢
Revenue (Gross)	200,000,000
Cost of Operations	80,000,000
Margin/Profit	120,000,000

Additional Information:

Tempane Mines LTD acquired 100% interest in Tongo for a consideration of GH¢310,000,000 at the end of 2023.
The cost of assets acquired at their respective acquisition dates are as follows:

Year	Cost of Assets (GH¢)
2020	100,000,000
2021	75,000,000
2023	50,000,000

Required:

i) Explain the tax implication of the 100% acquisition.

ii) Compute the gains from the above acquisition and determine how the gains should be treated.

Answer

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Tags: Acquisition, Capital Allowance, Corporate Restructuring, Deferred Tax, Mining Tax, Tax implications
Level: Level 3

Topic: Minerals and mining
Series: Nov 2024

CR – May 2016 – L3 – Q3 – Income Taxes (IAS 12)

Discuss and account for deferred taxation arising from temporary differences using IAS 12 for Limelight Plc.

Question

Limelight, a public limited company, is a major player in commodity brokerage and supplies. The following transactions relate to the year ended December 31, 2014.

Profit before taxation for the year was ₦487.5m. Taxable profit for the same period was ₦131.25m.

The balances of non-current assets of the company, at December 31, 2014:

N’000	Amount
Accounting carrying amount	937,500
Tax written down value	637,500

The balances above do not include a freehold building purchased in February 2014 for ₦750m. This building was revalued to ₦985m on December 31, 2014.

Accrued rental income on investment property at December 31, 2014, amounted to ₦9.75m. This income was credited to the statement of profit or loss as at year-end but was not received until three months after. Rental income is taxed by the Federal Inland Revenue Service on an actual basis when it is received.

No other temporary differences exist at December 31, 2014. Income tax and Withholding taxes on rental income are paid at 30% and 10% respectively, six months after the year.

Required:

a) Discuss the conceptual basis for the recognition of deferred taxation by Limelight Plc using the temporary difference approach in accordance with IAS 12, arising from the above transactions.

b (i) Outline how the above transactions should be accounted for using journal entries where appropriate.

b (ii) Calculate the provision for deferred tax after any necessary adjustments to the financial statements at December 31, 2014, and use journal entries.

Answer

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Tags: Deferred Tax, IAS 12, Journal Entries, Taxation, Temporary Differences
Level: Level 3

Topic: Income Taxes (IAS 12)

CR – May 2017 – L3 – Q3a – Impairment of Assets (IAS 36)

Discuss why FRCN should focus on impairment of non-financial and deferred tax assets during economic recession.

Question

The economic environment in the country has been very harsh, and it is now common knowledge that the economy is in a recession. This downturn impacts the income-generating capacity of companies, particularly in industries experiencing a significant decline in fortunes. Consequently, financial reporting regulators must closely examine evidence of impairment of assets in financial statements submitted by such companies.

Required:
Discuss briefly the reasons why the Financial Reporting Council of Nigeria (FRCN) should focus on the impairment of non-financial assets and deferred tax assets of listed companies in Nigeria during this period of slow economic growth. Also, outline the key areas entities should focus on when accounting for these items.

Answer

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Tags: Deferred Tax, Economic Recession, IAS 12, IAS 36, Impairment
Level: Level 3

Topic: Impairment of Assets (IAS 36)

CR – Nov 2014 – L3 – SC – Q4b – Income Taxes (IAS 12)

Evaluate the impact of deferred tax on fair value adjustments for property, plant, and equipment in an acquisition.

Question

On 1 June 2013, Bam Plc acquired Mango Limited for N3,150 million.
The fair value of the identifiable net assets of Mango Limited at this date was N825 million, and N2,550 million and retained earnings and other components of equity were N105 million, respectively. Mango Limited’s share capital was N1,500 million.

The excess of the fair value of the net assets is due to an increase in the value of property, plant, and equipment.

Required:
Evaluate the impact of full deferred tax on the excess of the fair value of the net assets attributable to the increase in the value of property, plant, and equipment of Bam Plc.

Answer

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Tags: Acquisition, Business combination, Deferred Tax, Fair value adjustment, IAS 12, Identifiable Net Assets, Plant & Equipment, Property
Level: Level 3

Topic: Income Taxes (IAS 12)
Series: NOV 2014

CR – Nov 2014 – L3 – SB – Q4a – Income Taxes (IAS 12)

Compute the impact of deferred tax on retained earnings and advise Lagos Plc on IAS 12 compliance.

Question

The following is the statement of financial position of Lagos Plc as at 31 December, 2013, with its immediate two comparative years.

The management of Lagos Plc is not sure of the impact of IAS 12 (Income Taxes) on its retained earnings as at 31 December, 2013, as well as what the new deferred tax balance will be on migrating to IFRS.

The following information was also available as at the year-end:

Details	Value (N’000)
Tax written down value of PPE	40,300
Tax written down value of goodwill	4,300
Tax base of trade receivables	29,800
Tax base of trade payables	13,000

Assume that current tax has been correctly computed in line with the applicable tax laws at 30%.

Required:
Using relevant computations, advise the management of Lagos Plc on the impact of deferred tax calculated on retained earnings in accordance with IAS 12.

Answer

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Tags: Deferred Tax, Financial Reporting, Goodwill, IAS 12, Income Taxes, Plant & Equipment, Property, Retained Earnings, Tax Base
Level: Level 3

Topic: Income Taxes (IAS 12)
Series: NOV 2014

CR – Nov 2014 – L3 – SB – Q2b – Income Taxes (IAS 12)

Discuss reasons for variances in effective tax rates and differences between tax charges and tax payments.

Question

Mr. Ojoowuro, the director of a grocery store, has noticed that the tax charge for his company is N15million on profits before tax of N105million. This is an effective rate of 14.3%. Another company, Irin Plc, has an income tax charge of N30million on profit before tax of N90million. This is an effective rate of tax of 33.3%, yet both companies state that the rate of income tax applicable to them is 25%. Mr. Ojoowuro has also noticed that in the statements of cash flows, each company has paid the same amount of tax of N24million.

Required:
Advise Mr. Ojoowuro on the possible reasons why the income tax charge in the financial statements as a percentage of the profit before tax may not be the same as the applicable income tax rate and why the tax paid in the statement of cash flows may not be the same as the tax charge in the statement of profit or loss and other comprehensive income. (7 Marks)

Answer

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Tags: Cash Flow Variances, Deferred Tax, Effective Tax Rate, Financial Statements, Income Tax, Tax adjustments, Tax provisions
Level: Level 3

Topic: Income Taxes (IAS 12)
Series: NOV 2013

CR – May 2021 – L3 – Q6 – Associates and Joint Ventures (IAS 28)

Discuss equity accounting for investment, accounting for deferred tax, and calculate the recoverable amount of equipment.

Question

Awa Publish has just recently acquired 18% of the shareholding in Tunbe, making it the second largest single shareholder. The majority shareholder has 58% voting shares, while the remainder of the shares is held by ten other shareholders, none holding more than 5% voting shares. The board of directors of Tunbe is made up of 12 members, with Awa Publish having 3 members and the majority shareholder having 7 members.

Awa Publish was able to negotiate its representation on the board due to its strategic importance in Tunbe’s operations and expansion plans. The directors of Awa Publish accounted for its investment in Tunbe as an equity investment. The directors feel that Tunbe should not be accounted for as an associate because Awa Publish does not have 20% of the voting interest and thus does not exercise significant influence over Tunbe.

Tunbe has been making losses for the past three years and has only returned a taxable profit once in the last five years. The projection is that Tunbe will return to making taxable profits in another five years. As part of the acquisition of shares in Tunbe, deferred tax assets for deductible temporary differences arose. The directors of Awa Publish are unsure how to account for this deferred tax asset.

Awa Publish has an item of equipment that cost N56 million. This item of plant and equipment currently has a carrying amount in the financial statements of N39.2 million. Awa Publish expects the operation of the equipment to generate undiscounted cash flows of N7 million per year for the next five years.

Awa Publish could generate immediate cash flow of N40 million if it sold the equipment today. However, if it did go ahead with the sale, it will have to pay a sales commission of 8.5%. The directors of Awa Publish are performing an annual impairment review and understand that determining the recoverable amount is an important part of this exercise.

Required:

a. Discuss how the investment in Tunbe should be accounted for in the financial statements of Awa Publish. (7 Marks)

b. Advise the directors of Awa Publish how the deferred tax asset that has arisen should be accounted for. (7 Marks)

c. Assist the directors of Awa Publish to determine the recoverable amount of the equipment. You may assume a discount rate of 10% or five-year annuity rate of 3.791, if relevant. (6 Marks)

Answer

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Tags: Deferred Tax, Equity Accounting, IAS 12, IAS 36, Recoverable Amount
Level: Level 3

Topic: Associates and Joint Ventures (IAS 28), Impairment of Assets (IAS 36), Income Taxes (IAS 12)

CR – May 2023 – L3 – Q6a – Share-Based Payments (IFRS 2)

Evaluate the deferred tax implications of share options for May 31, 2020, and 2021.

Question

Omoge Nigeria PLC has the following share options scheme for its directors as of May 31, 2021:

The price of the company’s shares as of:

May 31, 2021: ₦8 per share
May 31, 2020: ₦8.50 per share

Key details:

Directors must be working for Omoge Nigeria PLC on the vesting dates for the options to vest.
No directors have left the company since the share options were issued, and none are expected to leave before June 2023.
The options can be exercised on the first day of the month in which they vest.
In accordance with IFRS 2, an expense of ₦600,000 was charged to profit in the year ended May 31, 2020, and the cumulative expense for the two years ended May 31, 2021, is ₦2,200,000.
Tax allowances arise when the options are exercised and are based on the option’s intrinsic value at the exercise date.
Assume a tax rate of 30%.

Required:

Evaluate the deferred tax implications of the share options for the year ended May 31, 2020, and May 31, 2021. (10 Marks)

Answer

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Tags: Deferred Tax, IAS 12, IFRS 2, Share Options, Tax Allowances
Level: Level 3

Topic: Share-Based Payments (IFRS 2)

AAA – Nov 2020 – L3 – Q5 – Advanced Audit Planning and Strategy

Identification of financial statement risks in planning the final audit for Maideline Nigeria Limited’s winding-up.

Question

Maideline Nigeria Limited manufactures tyres for use by cars, trucks, and trailers. The company is owner-managed, meaning the shareholders are also the directors. On June 1, 2020, the directors decided to wind up the company due to the high cost of operations, the Naira’s depreciation against the US dollar, and the economic impact of COVID-19, which have severely impacted the company’s ability to continue business.

Management notified employees, suppliers, and customers that Maideline would cease all manufacturing activities by September 30. Consequently, all factory workers and most employees in accounts and administration were terminated effective September 30. Remaining employees will face redundancy by November 30. A minimal head office team, including the Company Secretary and some support staff, will remain operational for a few more years until the company winds down completely.

Maideline operated 20 branches and a head office. Of these, 12 branches are located in company-owned buildings, while the remaining 8 operate from leased buildings with lease terms of three to five years. Lease agreements prohibit sub-letting and sale. On adopting IFRS 16, the entity assumed lease renewals at term end, recording lease liabilities and right-of-use assets. A small head office building will remain in use until its lease expires in three years. Maideline accounts for its tangible non-current assets at cost, less depreciation, and has recognized deferred tax assets due to past tax losses and unutilized capital allowances.

All products sold carry a one-year warranty. Until May 31, 2020, the company offered two- and three-year extended warranties, but these were discontinued from March 1, 2020. Maideline distributes products nationally and internationally under three-year agreements and maintains annual supplier contracts. While no distributors or suppliers have pursued legal actions, some are withholding payments, awaiting penalty settlements they claim are due.

Required:
Using the information provided, identify and explain the financial statement risks to be taken into account in planning the final audit of Maideline in respect of the year ended December 31, 2020. (20 Marks)

Answer

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Tags: COVID-19 Impact, Deferred Tax, financial statement risks, IFRS 16, Inventory Valuation, Legal claims, Winding-up
Level: Level 3

Topic: Advanced Audit Planning and Strategy

CR – Nov 2020 – L3 – Q3 – Impairment of Assets (IAS 36)

Discuss the accounting treatment of Tupe Print's investment in Adowa plc, advise on deferred tax assets, and determine the recoverable amount of equipment.

Question

Tupe Print plc has just recently acquired 18% of the shareholding in Adowa plc, making it the second largest single shareholder. The majority shareholder has 58% voting shares, while the remainder of the shares are held by ten other shareholders, with none holding more than 5% voting shares. The board of directors of Adowa is made up of 12 members, with Tupe Print having 3 members and the majority shareholder having 7 members. Tupe Print was able to negotiate its representation on the board due to its strategic importance in Adowa‘s operations and expansion plans. The directors of Tupe Print have accounted for its investment in Adowa as an equity instrument investment. The directors feel Adowa should not be accounted for as an associate because Tupe Print does not have 20% of the voting interest and thus does not exercise significant influence over Adowa.

Adowa has been making losses for the past three years and has only returned a taxable profit once in the last five years. The projection is that Adowa will return to making taxable profits in another five years. As part of the acquisition of shares in Adowa, deferred tax assets for deductible temporary differences arose. The directors of Tupe Print are unsure of how to account for this deferred tax asset.

Tupe Print has an item of equipment which costs N56 million. This item of plant and equipment currently has a carrying value in the financial statements of N39.2 million. Tupe Print expects the operation of the equipment to generate undiscounted cash flows of N7 million per year for the next five years. Tupe Print could generate immediate cash flow of N40 million if the equipment is disposed of today. However, if the disposal is carried out, it will have to pay a sales commission of 8.5%. The directors of Tupe Print are performing an annual impairment review and understand that determining the recoverable amount is an important part of this exercise.

Required:

a. Discuss how the investment in Adowa plc should be accounted for in the financial statements of Tupe Print plc. (7 Marks)

b. Advise the directors of Tupe Print on how the deferred tax asset that has arisen should be accounted for. (7 Marks)

c. Assist the directors of Tupe Print in determining the recoverable amount of the equipment. You may assume a discount rate of 10% or a five-year annuity rate of 3.791 (if relevant). (6 Marks)

Answer

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Tags: Deferred Tax, Equity Instrument, Impairment Review, Investment Accounting, Recoverable Amount
Level: Level 3

Topic: Associates and Joint Ventures (IAS 28), Impairment of Assets (IAS 36)

FR – Nov 2015 – L2 – Q1 – Preparation of Financial Statements

This question requires recalculating DX Ltd’s profit for the year ended March 31, 2015, considering adjustments for sales, depreciation, fraud, and tax.

Question

Below is the summarised draft statement of financial position of DX Ltd, a company listed on the Ghana Stock Exchange, as at 31 March, 2015:

The following information is relevant:

DX Ltd’s statement of profit or loss includes GHS8 million of revenue for credit sales made on a ‘sale or return’ basis. At 31 March 2015, customers who had not paid for the goods had the right to return GHS2.6 million of them. DX Ltd applied a mark-up on cost of 30% on all these sales. In the past, DX Ltd’s customers have sometimes returned goods under this type of agreement.
The non-current assets have not been depreciated for the year ended 31 March 2015.
DX Ltd has a policy of revaluing its land and buildings at the end of each accounting year. The values in the above statement of financial position as at 1 April 2014 when the building had a remaining life of 15 years. A qualified surveyor has valued the land and buildings at 31 March 2015 at GHS180 million.
Plant is depreciated at 20% on the reducing balance basis.
The financial assets at fair value through profit or loss are held in a fund whose value changes directly in proportion to a specified market index. At 1 April 2014 the relevant index was 1,200, and at 31 March 2015, it was 1,296.
In late March 2015, the directors of DX Ltd discovered a material fraud perpetrated by the company’s credit controller that had been continuing for some time. Investigations revealed that a total of GHS4 million of the trade receivables as shown in the statement of financial position at 31 March 2015 had in fact been paid, and the money had been stolen by the credit controller. An analysis revealed that GHS1.5 million had been stolen in the year to 31 March 2014, with the rest being stolen in the current year. DX Ltd is not insured for this loss, and it cannot be recovered from the credit controller, nor is it deductible for tax purposes.
During the year, the company’s taxable temporary differences increased by GHS10 million, of which GHS6 million related to the revaluation of the property. The deferred tax relating to the remainder of the increase in the temporary differences should be taken to profit and loss. The applicable income tax rate is 20%.
The above figures do not include the estimated provision for income tax on the profit for the year ended 31 March 2015. After allowing for any adjustments required in terms (i) to (iv), the directors have estimated the provision of GHS11.4 million (this is in addition to the deferred tax effects of item (v)).
During the year, dividends of GHS15.5 million were paid. These have been correctly accounted for in the above statement of financial position.

Required:
Taking into account any adjustments required by items (i) to (vii) above:

a) Prepare a statement showing the recalculation of DX Ltd’s profit for the year ended 31 March 2015. (7 marks)

b) Redraft the statement of financial position of DX Ltd as at 31 March 2015. (13 marks)
(Notes to the financial statements are not required).
(Total: 20 marks)

Answer

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Tags: Deferred Tax, Depreciation, Fraud, Profit recalculation, sale-or-return
Level: Level 2

Topic: Presentation of financial statements
Series: NOV 2015

CR – May 2018 – L3 – Q2e – IAS 12: Income Taxes

Explain how to account for deferred tax arising from revaluation of land.

Question

On 1 October 2016, Abudu Ltd decided to revalue its land for the first time. The land was originally purchased six years ago for GH¢65,000 and was revalued to its current market value of GH¢80,000 on 1 October 2016. The difference between Abudu Ltd’s net assets (including revaluation of land) and the lower tax base at 30 September 2017 was GH¢27,000. The opening deferred tax liability at 1 October 2016 was GH¢2,600, and Abudu Ltd’s tax rate is 25%.

Required:
Explain how to account for the above transaction in the financial statements of Abudu Ltd for the year to 30 September 2017. (5 marks)

Answer

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Tags: Deferred Tax, Financial Statements, IAS 12, Income tax expense, Revaluation
Level: Level 3

Topic: IAS 12: Income taxes
Series: MAY 2018

CR – Nov 2023 – L3 – Q1 – Consolidated Financial Statements

Preparation of consolidated statement of profit or loss and other comprehensive income including adjustments for NCI, goodwill, and fair value.

Question

Below are the statements of comprehensive income of Agingo Plc (Agingo), Telemo Plc (Telemo), and Zimbo Plc (Zimbo) for the year ended 31 March 2023:

Item	Agingo (GH¢000)	Telemo (GH¢000)	Zimbo (GH¢000)
Revenue	432,840	302,988	259,704
Cost of sales	(194,778)	(136,345)	(116,867)
Gross profit	238,062	166,643	142,837
Operating expenses	(83,322)	(58,325)	(49,993)
Other income	10,821	7,575	6,493
Finance cost	(5,952)	(4,166)	(3,571)
Profit before tax	159,609	111,727	95,766
Tax	(39,902)	(29,927)	(27,134)
Profit for the year	119,707	81,800	68,632
Other comprehensive income	6,493	5,843	–
Total comprehensive income	126,200	87,643	68,632

Additional Information:

Agingo held 15% of the equity shares of Telemo and acquired an additional 45% and 10% of the loan stock during the year.
Fair value adjustments were made for the production machinery of Telemo, which had a useful life of 4 years.
Agingo acquired 70% of Zimbo in 2016.
Intercompany transactions occurred between Telemo and Agingo.
There were shareholding increases and impairments during the year.
Any intercompany dividends were excluded.

Required:
Prepare the consolidated statement of profit or loss and other comprehensive income of Agingo’s group for the year ended 31 March 2023. (All your workings are to be rounded to the nearest thousand).

Answer

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Tags: Consolidation, Deferred Tax, Fair Value, Goodwill, Non-Controlling Interest
Level: Level 3

Topic: Consolidated Financial Statements
Series: NOV 2023

CR – Mar 2023 – L3 – Q2b – IAS 12: Income taxes

Discuss the appropriate accounting treatments for Sanda Ltd’s preference shares and deferred tax asset.

Question

Sanda Ltd, a consumer electronics company in Accra, faced a challenging year due to increased competition and COVID-19. Sanda Ltd has a year-end of 31 December 2021. The unaudited financial statements reported an operating loss, and debt covenant limits were close to being breached. The following occurred during the year:

i. On 1 January 2021, the Finance Director and CEO paid GH¢3 million each for preference shares that provide cumulative dividends of 7% per annum. These preference shares can either be converted into a fixed number of ordinary shares in three years or redeemed at par. The Finance Director suggested classifying the preference shares as equity.

ii. Sanda Ltd included a deferred tax asset in the statement of financial position based on losses incurred in the previous two years. The Finance Director asked the Accountant to include the deferred tax asset in full, expecting a return to profitability once funding issues are resolved.

Required:
With reference to International Financial Reporting Standards (IFRS), discuss the appropriate accounting treatments which Sanda Ltd should adopt for the issues identified in i) and ii) and their impact on gearing as at 31 December 2021.

Answer

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Tags: Convertible Instruments, Deferred Tax, Equity, IAS 12, IAS 32
Level: Level 3

Topic: IAS 12: Income taxes
Series: MAR 2023

Question Tag: Deferred Tax

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AT – Nov 2024 – L3 – Q2b – Tax Implications of 100% Acquisition in Mining Operations

Explain the tax implications of a 100% acquisition and compute the gains from the acquisition.

CR – May 2016 – L3 – Q3 – Income Taxes (IAS 12)

Discuss and account for deferred taxation arising from temporary differences using IAS 12 for Limelight Plc.

CR – May 2017 – L3 – Q3a – Impairment of Assets (IAS 36)

Discuss why FRCN should focus on impairment of non-financial and deferred tax assets during economic recession.

CR – Nov 2014 – L3 – SC – Q4b – Income Taxes (IAS 12)

Evaluate the impact of deferred tax on fair value adjustments for property, plant, and equipment in an acquisition.

CR – Nov 2014 – L3 – SB – Q4a – Income Taxes (IAS 12)

Compute the impact of deferred tax on retained earnings and advise Lagos Plc on IAS 12 compliance.

CR – Nov 2014 – L3 – SB – Q2b – Income Taxes (IAS 12)

Discuss reasons for variances in effective tax rates and differences between tax charges and tax payments.

CR – May 2021 – L3 – Q6 – Associates and Joint Ventures (IAS 28)

Discuss equity accounting for investment, accounting for deferred tax, and calculate the recoverable amount of equipment.

Required:

CR – May 2023 – L3 – Q6a – Share-Based Payments (IFRS 2)

Evaluate the deferred tax implications of share options for May 31, 2020, and 2021.

AAA – Nov 2020 – L3 – Q5 – Advanced Audit Planning and Strategy

Identification of financial statement risks in planning the final audit for Maideline Nigeria Limited’s winding-up.

CR – Nov 2020 – L3 – Q3 – Impairment of Assets (IAS 36)

Discuss the accounting treatment of Tupe Print's investment in Adowa plc, advise on deferred tax assets, and determine the recoverable amount of equipment.

FR – Nov 2015 – L2 – Q1 – Preparation of Financial Statements

This question requires recalculating DX Ltd’s profit for the year ended March 31, 2015, considering adjustments for sales, depreciation, fraud, and tax.

CR – May 2018 – L3 – Q2e – IAS 12: Income Taxes

Explain how to account for deferred tax arising from revaluation of land.

CR – Nov 2023 – L3 – Q1 – Consolidated Financial Statements

Preparation of consolidated statement of profit or loss and other comprehensive income including adjustments for NCI, goodwill, and fair value.

CR – Mar 2023 – L3 – Q2b – IAS 12: Income taxes

Discuss the appropriate accounting treatments for Sanda Ltd’s preference shares and deferred tax asset.

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AT – Nov 2024 – L3 – Q2b – Tax Implications of 100% Acquisition in Mining Operations

Explain the tax implications of a 100% acquisition and compute the gains from the acquisition.

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CR – May 2016 – L3 – Q3 – Income Taxes (IAS 12)

Discuss and account for deferred taxation arising from temporary differences using IAS 12 for Limelight Plc.

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CR – May 2017 – L3 – Q3a – Impairment of Assets (IAS 36)

Discuss why FRCN should focus on impairment of non-financial and deferred tax assets during economic recession.

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CR – Nov 2014 – L3 – SC – Q4b – Income Taxes (IAS 12)

Evaluate the impact of deferred tax on fair value adjustments for property, plant, and equipment in an acquisition.

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CR – Nov 2014 – L3 – SB – Q4a – Income Taxes (IAS 12)

Compute the impact of deferred tax on retained earnings and advise Lagos Plc on IAS 12 compliance.

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CR – Nov 2014 – L3 – SB – Q2b – Income Taxes (IAS 12)

Discuss reasons for variances in effective tax rates and differences between tax charges and tax payments.

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CR – May 2021 – L3 – Q6 – Associates and Joint Ventures (IAS 28)

Discuss equity accounting for investment, accounting for deferred tax, and calculate the recoverable amount of equipment.

Required:

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CR – May 2023 – L3 – Q6a – Share-Based Payments (IFRS 2)

Evaluate the deferred tax implications of share options for May 31, 2020, and 2021.

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AAA – Nov 2020 – L3 – Q5 – Advanced Audit Planning and Strategy

Identification of financial statement risks in planning the final audit for Maideline Nigeria Limited’s winding-up.

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CR – Nov 2020 – L3 – Q3 – Impairment of Assets (IAS 36)

Discuss the accounting treatment of Tupe Print's investment in Adowa plc, advise on deferred tax assets, and determine the recoverable amount of equipment.

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FR – Nov 2015 – L2 – Q1 – Preparation of Financial Statements

This question requires recalculating DX Ltd’s profit for the year ended March 31, 2015, considering adjustments for sales, depreciation, fraud, and tax.

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CR – May 2018 – L3 – Q2e – IAS 12: Income Taxes

Explain how to account for deferred tax arising from revaluation of land.

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CR – Nov 2023 – L3 – Q1 – Consolidated Financial Statements

Preparation of consolidated statement of profit or loss and other comprehensive income including adjustments for NCI, goodwill, and fair value.

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CR – Mar 2023 – L3 – Q2b – IAS 12: Income taxes

Discuss the appropriate accounting treatments for Sanda Ltd’s preference shares and deferred tax asset.

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