Deferred tax assets and deferred tax liabilities result from:
Permanent differences between pre-tax accounting profit and taxable profit
Temporary differences between pre-tax accounting profit and taxable profit
Permanent and temporary differences between pre-tax accounting profit and taxable profit
Tax authority rules
On the statement of cash flows using the indirect method, an increase in the deferred tax liability would be shown as:
An addition to net income
A deduction to net income
An increase in investing activities
An increase in financing activities
A taxable temporary difference is expected to lead to the payment of:
More tax in the future and gives rise to a deferred tax asset
Less tax in the future and gives rise to a deferred tax asset
More tax in the future and gives rise to a deferred tax liability
Less tax in the future and gives rise to a deferred tax liability
Which of the following items does not create a temporary difference between accounting profit and taxable profit?
Unearned rent income
A traffic fine
Write-down of inventories
An allowance for doubtful debts
Under IAS 12 Income Taxes, which approach is used to determine deferred tax expense?
Asset and equity approach;
Income statement approach
Balance sheet approach
Net of tax approach
Differences between pre-tax accounting profit and taxable profit in an accounting period that will not reverse in a later accounting period are called:
Temporary differences
Permanent differences
Deductible temporary differences
Deferred taxes
If depreciation expense on the income statement is £10,000 and is £20,000 on the tax return (and this is the only temporary difference), assuming a tax rate of 40%, the statement of financial position would report a:
Deferred tax asset of £4,000
Deferred tax liability of £4,000
Deferred tax asset of £8,000
Deferred tax liability of £8,000
At the end of the reporting period (December 31, 20X7) Banco Ltd., reported a deferred tax liability of €140,000 and a deferred tax asset of €40,000. At the end of reporting period 20X8, Banco Ltd. reported a deferred tax liability of €200,000 and a deferred tax asset of €44,000. The net deferred tax expense for reporting period 20X8 is:
€60,000
€44,000
€56,000
€4,000
Company Alfa has acquired a subsidiary and goodwill arising on the transaction amounts to CHF12m. Goodwill is not allowable for tax purposes in Alfa’s jurisdiction. The tax rate for Alfa is 30% and the subsidiary is 60% owned. The deferred tax liability relating to goodwill will be:
CHF7.6m
CHF3.6m
CHF12m
Zero
A company received rent in advance of €8,000 on December 31, 20X8, which was taxable when received for income tax purposes. The company's tax rate was 20%, and this was the only temporary difference. Which of the following should be reported on the December 31, 20X8, statement of financial position?