100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
IAS 12 - Income Taxes Beginner Summary $5.91
Add to cart

Summary

IAS 12 - Income Taxes Beginner Summary

 18 views  0 purchase
  • Course
  • Institution

IAS 12 - Income Taxes Beginner Summary

Preview 2 out of 9  pages

  • January 31, 2022
  • 9
  • 2021/2022
  • Summary
avatar-seller
IAS 12 – INCOME TAXES

Normal Tax Process

31 Dec 31 Dec 31 Dec
30 Jun 28 Feb 31 May 31 Oct
2010 2011 2012
2011 2012 2012 2012
Year-end Year-end Year-end




First Second Company SARS sends SARS settles
provisional provisional estimates tax assessment the ref und to
tax payment tax payment taxable – they calculate the company
of R25 000 of R30 000 income of taxable income
R100 000 as R150 000
and submits
tax return


Step 1: 30 June 2011 Dt Tax payable (SFP) 25 000
Ct Bank (SFP) 25 000
(1st provisional payment)

31 Dec 2011 Dt Tax payable (SFP) 30 000
Ct Bank (SFP) 30 000
(2nd provisional payment)

Step 2: 31 Dec 2011 Dt Tax expense (P/L) 28 000
Ct Tax payable (SFP) 28 000
(Tax estimate for 2011 tax
year – 100 000 x 28%)

Step 5: 31 May 2012 Dt Tax expense (P/L) 14 000
Ct Tax payable (SFP) 14 000
(Under-provision for 2011 tax
year – (42 000 – 28 000))

Step 6: 31 Oct 2012 Dt Bank (SFP) 13 000
Ct Tax payable (SFP) 13 000
(Refund received from SARS
for 2011 tax year)
(25 000 + 30 000 = 55 000)
(55 000 – 42 000 = 13 000)

, Income tax liability (SFP)
Bank (SFP) 25 000
1st provisional payment
Bank (SFP) 30 000
2nd provisional payment
Tax expense (P/L) 28 000
tax estimate
C/B 27 000
55 000 55 000

O/B 27 000
Tax expense (P/L) 14 000
under-provision
Bank (SFP) 13 000
Final refund from SARS
27 000 27 000



Penalties and Fines

Dr Penalties (P/L) 20 000
Cr Income tax payable (SFP) 20 000
Penalties charged for the 2011 tax year

Dr Interest expense (P/L) 4 000
Cr Income tax payable (SFP) 4 000
Interest charged for the 2012 tax year




Tax Base of an Asset (Par 5)
 Amount deductible for tax purposes (CP – Accumulated wear and tear/building
allowance) UNLESS:
 Those benefits are NOT taxable: then TB = CA

Tax Base of a Liability (Par 8)
 CA less amount deductible in the future periods
 Income Received in Advance -> Tax Base = CA less Amount of revenue that will NOT be
taxable in the future

Tax Base if not an Asset or Liability (Par 9)
 E.g. Research costs
 Accounting – CA in SFP = R nil (expense in P/L in year occurred)

Tax purposes
- Only later allowed as deduction
- Tax base of research cost = amount deductible in future for tax purposes

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller laurenabrahams. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $5.91. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

52355 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$5.91
  • (0)
Add to cart
Added