Summary
FAC3761 - IAS + IFRS summary and made easy
- Institution
- University Of South Africa (Unisa)
This is a summary of the IAS + IFRS in this module
[Show more]
3 reviews
By: nthabi74 • 4 months ago
By: melaniemuller777 • 1 year ago
By: gracesimbili • 2 year ago
Content preview
FAC3761, Assets / Liabilities
Carrying Amount (CA) Tax Base (TB)
Assets : Amount deductable for tax purposes against future economic
benefits (When it recovers the CA)
The amount in the statement of financial position Liabilities : CA of a liability less the amount deductible for tax purposes in the
future periods
Revenue received in advance : CA less revenue not be taxable in future.
TEMPORARY DIFFERENCE
1. Taxable Temporary difference 1. Deductible Temporary difference
Assets: CA > TB (RULE 1) Assets: CA < TB (RULE 3)
Liabilities: CA < TB (RULE 2) Liabilities: CA > TB (RULE 4)
This gives rise to a : Deferred tax liability This gives rise to a : Deferred tax asset
Journal entry: Journal entry:
Deferred tax expense (P/L) xxx Deferred asset (SFP) xxx
Deferred tax liability (SFP) xxx Deferred tax (P/L) xxx
(Provision made for deferred tax liability) (Provision made for deferred tax liability)
NB : Exemptions - IAS12 parg 15. NB : Exemptions - IAS12 parg 24.
ie 1 - 4
(ASSETS) RULE 1 = CA > TB = Taxable Temporary difference = DEFERRED TAX LIABILITY (SFP)
Journal entry: Dr Cr
R R
Deferred tax expense (P/L) xxx
Deferred tax liability (SFP) xxx
(Provision made for deferred tax expense)
Accounting purposes Tax purposes
Carrying amount: Tax base:
(Original cost - Accumulated depreciation) (Original cost - Accumulated capital allowances (Tax allowances))
Profit/Loss on sale (Capital & non-capital portions): Recoupment / Scrapping allowance:
(Proceeds on sale - CA) (Proceeds on sale (Limited to original cost) - TB)
Non-capital profit:
(Proceeds on sale (Limited to original cost) - CA)
Temporar
y
Carrying Differenc Deferred
Deferred tax on asset Amount Tax Base e tax
R R R R
Cost xxx xxx xxx
Depreciation/tax allowance xxx xxx xxx
Carrying amount/Tax base - - - -
Voorbeelde:
- Capital allowances
- Prepayments (Paid in advance)
(LIABILITIES) RULE 2 = CA < TB = Taxable Temporary difference = DEFERRED TAX LIABILITY (SFP)
Journal entry: Dr Cr
R R
Deferred tax expense (P/L) xxx
Deferred tax liability (SFP) xxx
(Provision made for deferred tax expense)
Voorbeelde:
- Construction contracts (Section 24C Allowance)
, (ASSETS) RULE 3 = CA < TB = Deductible Temporary difference = DEFERRED TAX ASSET (P/L)
(LIABILITIES) RULE 4 = CA > TB = Deductible Temporary difference = DEFERRED TAX ASSET (P/L)
Journal entry: Dr Cr
R R
Deferred asset (SFP) xxx
Deferred tax (P/L) xxx
(Provision made for deferred tax)
Voorbeelde:
- Revenue received in advance
- Warranty costs
The benefits of buying summaries with Stuvia:
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
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
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 this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller EducationSA. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R50,00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
53068 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now