ABC Company prepares financial statements under IFRS. At December 13, Year 4, ABC's income for financial (book) purposes equaled P100,000 and ABC's only temporary difference related to depreciation. For financial (book) purposes, depreciation equaled P10,000 and for tax purposes, depreciation equaled P15,000. The difference is expected to reverse evenly over the next two years. The enacted tax rate for the current year, Year 4, is 30% and the enacted tax rate for all future years is 40%. In its year-end balance sheet, what amount should ABC reports as a deferred tax asset (liability)?

ABC Company prepares financial statements under IFRS. At December 13, Year 4, ABC's income for financial (book) purposes equaled P100,000 and ABC's only temporary difference related to depreciation. For financial (book) purposes, depreciation equaled P10,000 and for tax purposes, depreciation equaled P15,000. The difference is expected to reverse evenly over the next two years. The enacted tax rate for the current year, Year 4, is 30% and the enacted tax rate for all future years is 40%. In its year-end balance sheet, what amount should ABC reports as a deferred tax asset (liability)?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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