Transcription of SECTION 29 DEFERRED TAX - SAIPA
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SECTION 29 DEFERRED TAX - SAIPA
SECTION 29 DEFERRED . TAX. SCOPE. SECTION 29 covers accounting for income tax It requires the recognition of current and future tax consequences of transactions/events recognised in financial statements ( ). OBJECTIVE. Understand why DEFERRED tax is necessary Understand what is meant by the tax base of an asset and the tax base of a liability Understand what is meant by temporary differences Measure DEFERRED tax balances using the balance sheet approach Understand how to account for DEFERRED tax when the revaluation model is elected for property, plant and equipment Understand the need for a tax rate reconciliation Prepare a tax rate reconciliation Present and disclose DEFERRED tax in the financial statement of a company INTRODUCTION. Income tax includes both domestic and foreign taxes as a result of taxable income ( ) Income: earlier of Accrual basis of Accounting Tax (SARS) receipt or accrual Differences accounti Expenses: ng Use own rules Use own rules when (IFRS) to (Income Tax incurred or determine how Act) to Reflect to recognise paid determine what substance income and tax is owed According over form expenses to legal form Accounting Taxable income profit THE TAX EXPENSE OF A COMPANY.
•Section 29 covers accounting for income tax •It requires the recognition of current and future tax consequences of transactions/events recognised in financial statements (s29.2) OBJECTIVE • Understand why deferred tax is necessary • Understand what is meant by the tax base of an asset
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