04-29-2010, 04:36 PM
1. Using income statement liability method Yes solution is correct except for you are using income tax expense account instead of deferred tax expense so entries will be
Deferred Tax Exp to Deferred Tax assets and vise versa. Income tax expense could be debited for current year tax not for deferred tax. Further, IAS-12 requires balance sheet liability method for deferred tax calcs.
2. IAS-12 revised requires to calculate deferred tax on all temporary differences except for where tax base and carrying value of asset or liability is different at the time of initial recognition, However there are certain other exceptions too.IAS-12 did not define permanent differences. For calculating your current taxation your calcs are ok.
Deferred Tax Exp to Deferred Tax assets and vise versa. Income tax expense could be debited for current year tax not for deferred tax. Further, IAS-12 requires balance sheet liability method for deferred tax calcs.
2. IAS-12 revised requires to calculate deferred tax on all temporary differences except for where tax base and carrying value of asset or liability is different at the time of initial recognition, However there are certain other exceptions too.IAS-12 did not define permanent differences. For calculating your current taxation your calcs are ok.
