Income Taxes – Knowsia

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

FR – May 2024 – L2 – SA – Q7 – Accounting for Income Taxes

Explains the qualitative characteristics of financial statements and describes the methods of valuation for property, plant, and equipment.

Question

a. The Conceptual Framework for Financial Reporting states the qualitative characteristics of financial information.

Required:
Identify and explain FIVE qualitative characteristics of general-purpose financial statements. (10 Marks)

b. IAS 16 prescribes the principles and the valuation methods in recognizing items of property, plant, and equipment in the financial statements of an entity.

Required:
Describe the TWO methods of valuation recognized in IAS 16 on property, plant, and equipment. (5 Marks)

Answer

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Tags: Current Tax, Deferred Tax, IAS 12, Income Taxes, Tax Expense, Tax liabilities
Level: Level 2

Topic: Accounting for Income Taxes (IAS 12)
Series: MAY 2023

FR – May 2018 – L2 – Q6b – Accounting for Income Taxes (IAS 12)

Calculate the deferred tax charge/credit for Lawmarg Nigeria Limited and the deferred tax balance in the statement of financial position.

Question

Lawmarg Nigeria Limited purchased an item of plant for N2,000,000 on October 1, 2014. It had an estimated life of eight years and an estimated residual value of N400,000. The plant is depreciated on a straight-line basis. The tax authorities do not allow depreciation as a deductible expense. Instead, an initial capital allowance of 40% of the cost of this type of asset can be claimed against income tax, and 20% per annum (on a reducing balance basis) of its tax base thereafter. The rate of income tax is 30%.

Required: In respect of the above item of plant, calculate the deferred tax charge/credit in Lawmarg Nigeria Limited’s statement of profit or loss for the year ended December 31, 2017, and the deferred tax balance in the statement of financial position at that date.

Answer

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Tags: Deferred Tax, Depreciation, IAS 12, Income Taxes, Tax Base, Temporary Differences
Level: Level 2

Topic: Accounting for Income Taxes (IAS 12)
Series: MAY 2018

FR – May 2018 – L2 – Q6a – Accounting for Income Taxes (IAS 12)

Explain the need for providing deferred tax and the principles for accounting for deferred tax under IAS 12.

Question

IAS 12 – Income Tax details the requirements relating to the accounting treatment of deferred tax and current income tax.

Required: Explain the need to provide for deferred tax and briefly outline the principles of accounting for deferred tax contained in IAS 12.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounting Standards, Deferred Tax, IAS 12, Income Taxes, Temporary Differences
Level: Level 2

Topic: Accounting for Income Taxes (IAS 12)
Series: MAY 2018

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 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

Find Related Questions by Tags, levels, etc.

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

FR – May 2024 – L2 – SA – Q7 – Accounting for Income Taxes

Explains the qualitative characteristics of financial statements and describes the methods of valuation for property, plant, and equipment.

Question

a. The Conceptual Framework for Financial Reporting states the qualitative characteristics of financial information.

Required:
Identify and explain FIVE qualitative characteristics of general-purpose financial statements. (10 Marks)

b. IAS 16 prescribes the principles and the valuation methods in recognizing items of property, plant, and equipment in the financial statements of an entity.

Required:
Describe the TWO methods of valuation recognized in IAS 16 on property, plant, and equipment. (5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Current Tax, Deferred Tax, IAS 12, Income Taxes, Tax Expense, Tax liabilities
Level: Level 2

Topic: Accounting for Income Taxes (IAS 12)
Series: MAY 2023

FR – May 2018 – L2 – Q6b – Accounting for Income Taxes (IAS 12)

Calculate the deferred tax charge/credit for Lawmarg Nigeria Limited and the deferred tax balance in the statement of financial position.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Deferred Tax, Depreciation, IAS 12, Income Taxes, Tax Base, Temporary Differences
Level: Level 2

Topic: Accounting for Income Taxes (IAS 12)
Series: MAY 2018

FR – May 2018 – L2 – Q6a – Accounting for Income Taxes (IAS 12)

Explain the need for providing deferred tax and the principles for accounting for deferred tax under IAS 12.

Question

IAS 12 – Income Tax details the requirements relating to the accounting treatment of deferred tax and current income tax.

Required: Explain the need to provide for deferred tax and briefly outline the principles of accounting for deferred tax contained in IAS 12.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounting Standards, Deferred Tax, IAS 12, Income Taxes, Temporary Differences
Level: Level 2

Topic: Accounting for Income Taxes (IAS 12)
Series: MAY 2018

Question Tag: Income Taxes

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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.

FR – May 2024 – L2 – SA – Q7 – Accounting for Income Taxes

Explains the qualitative characteristics of financial statements and describes the methods of valuation for property, plant, and equipment.

FR – May 2018 – L2 – Q6b – Accounting for Income Taxes (IAS 12)

Calculate the deferred tax charge/credit for Lawmarg Nigeria Limited and the deferred tax balance in the statement of financial position.

FR – May 2018 – L2 – Q6a – Accounting for Income Taxes (IAS 12)

Explain the need for providing deferred tax and the principles for accounting for deferred tax under IAS 12.

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.

FR – May 2024 – L2 – SA – Q7 – Accounting for Income Taxes

Explains the qualitative characteristics of financial statements and describes the methods of valuation for property, plant, and equipment.

FR – May 2018 – L2 – Q6b – Accounting for Income Taxes (IAS 12)

Calculate the deferred tax charge/credit for Lawmarg Nigeria Limited and the deferred tax balance in the statement of financial position.

FR – May 2018 – L2 – Q6a – Accounting for Income Taxes (IAS 12)

Explain the need for providing deferred tax and the principles for accounting for deferred tax under IAS 12.

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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.

You're reporting an error for "CR – Nov 2014 – L3 – SB – Q4a – Income Taxes (IAS 12)"

FR – May 2024 – L2 – SA – Q7 – Accounting for Income Taxes

Explains the qualitative characteristics of financial statements and describes the methods of valuation for property, plant, and equipment.

You're reporting an error for "FR – May 2024 – L2 – SA – Q7 – Accounting for Income Taxes"

FR – May 2018 – L2 – Q6b – Accounting for Income Taxes (IAS 12)

Calculate the deferred tax charge/credit for Lawmarg Nigeria Limited and the deferred tax balance in the statement of financial position.

You're reporting an error for "FR – May 2018 – L2 – Q6b – Accounting for Income Taxes (IAS 12)"

FR – May 2018 – L2 – Q6a – Accounting for Income Taxes (IAS 12)

Explain the need for providing deferred tax and the principles for accounting for deferred tax under IAS 12.

You're reporting an error for "FR – May 2018 – L2 – Q6a – Accounting for Income Taxes (IAS 12)"

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.

You're reporting an error for "CR – Nov 2014 – L3 – SB – Q4a – Income Taxes (IAS 12)"

FR – May 2024 – L2 – SA – Q7 – Accounting for Income Taxes

Explains the qualitative characteristics of financial statements and describes the methods of valuation for property, plant, and equipment.

You're reporting an error for "FR – May 2024 – L2 – SA – Q7 – Accounting for Income Taxes"

FR – May 2018 – L2 – Q6b – Accounting for Income Taxes (IAS 12)

Calculate the deferred tax charge/credit for Lawmarg Nigeria Limited and the deferred tax balance in the statement of financial position.

You're reporting an error for "FR – May 2018 – L2 – Q6b – Accounting for Income Taxes (IAS 12)"

FR – May 2018 – L2 – Q6a – Accounting for Income Taxes (IAS 12)

Explain the need for providing deferred tax and the principles for accounting for deferred tax under IAS 12.

You're reporting an error for "FR – May 2018 – L2 – Q6a – Accounting for Income Taxes (IAS 12)"

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