03-26-2010, 03:24 PM
Osaid
Your definitions are good but the terms tax depreciation and accounting depreciation are wide and many legalities are also involved. Furthermore the "Deferred Tax" ,in many cases, raised due to the presence of accounting and tax depreciation differences. Deferred Tax is dealt in accordance with International Accounting Standard-12 (IAS-12).Application of IAS-12 results in complication of calculations to determine vale of assets for tax and financial reporting purposes and often require maintenance of separate records of assets for tax and accounting purposes.
Currently Initial Allowance and First Year Allowance are allowed at the rate of 50% and 90% respectively under section 23 and 23(A) of ITO. In practice these allowances are not incorporated in the books of accounts but at the same time in mostly organization IAS-12 is not adopted in true sprit. In group of accounts and mergers (Consolidations and Amalgamation) the presence of deferred tax assets or deferred tax liabilities in the books of accounts of amalgamated, amalgamating, subsidiary and parent companies/organizations involve extensive application of IASâs/IFRSâs and Legal provision of tax and corporate laws.
Regards,
Awais Aftab
Your definitions are good but the terms tax depreciation and accounting depreciation are wide and many legalities are also involved. Furthermore the "Deferred Tax" ,in many cases, raised due to the presence of accounting and tax depreciation differences. Deferred Tax is dealt in accordance with International Accounting Standard-12 (IAS-12).Application of IAS-12 results in complication of calculations to determine vale of assets for tax and financial reporting purposes and often require maintenance of separate records of assets for tax and accounting purposes.
Currently Initial Allowance and First Year Allowance are allowed at the rate of 50% and 90% respectively under section 23 and 23(A) of ITO. In practice these allowances are not incorporated in the books of accounts but at the same time in mostly organization IAS-12 is not adopted in true sprit. In group of accounts and mergers (Consolidations and Amalgamation) the presence of deferred tax assets or deferred tax liabilities in the books of accounts of amalgamated, amalgamating, subsidiary and parent companies/organizations involve extensive application of IASâs/IFRSâs and Legal provision of tax and corporate laws.
Regards,
Awais Aftab
