Accounting Testbank Part 9

1.	The tax base of revenue received in advance is equal to zero where the revenue received is taxed in the reporting period that the revenue is received. True False

2.	Deferred tax assets are the amounts of income taxes recoverable in future periods that arise from assessable temporary differences. True False

3.	Deferred tax assets may arise from amounts of income taxes recoverable in future periods that arise from carry forward of unused tax losses. True False

4.	The balance sheet approach compares the carrying value with the tax base of the assets and liabilities. True False

5.	Non-deductible expenses in the current or subsequent periods results in a deferred tax asset. True False

6.	The tax-effect of the temporary difference that arises from revaluation of non-current assets is recognised in profit and loss. True False

7.	It is possible for a firm to legally make a large accounting profit but pay little or no tax based on its taxable income. True False

8.	Profit for taxation purposes is determined in accordance with AASB 112. True False

9.	The difference between the carrying amount of an asset or liability in the balance sheet and its tax base is a temporary difference. True False

10.	There are two types of temporary differences between the carrying value of assets and liabilities and the tax base—assessable temporary differences and neutral temporary differences. True False

11.	The tax figure calculated and recorded on the statement of comprehensive income is an accurate reflection of the entity's tax liability for the stated period. True False

12.	The balance sheet approach to accounting for taxation relies on comparing the historical cost of an item with its appropriate tax base. True False

13.	When the carrying amount of an asset exceeds its tax base, the amount that will be allowed as a deduction for tax purposes will exceed the amount of assessable economic benefits. True False

14.	Under AASB 112, where the carrying amount of an asset is less than the amount that is economically recoverable, the deferred tax asset should be adjusted. True False

15.	According to AASB 112, with one exception, the tax base of a liability is to be determined in the following manner: Carrying amount – Future deductible amount + Future assessable amount. True False

16.	AASB 112 defines the tax base as the amount that is attributed to an asset or liability for tax purposes. True False

17.	Deferred tax assets arise as a result of tax losses. In Australia losses incurred in previous years can always be carried forward to offset taxable income derived in future years. True False

18.	When a non-current asset is revalued the tax base is not affected as depreciation for tax purposes will continue to be based on original cost. True False

19.	When a non-current asset is revalued, the recognition of future tax associated with an asset that has a fair value in excess of cost, acts to reduce the amount of the revaluation reserve. True False

20.	AASB 112 required an entity to offset current tax assets and current tax liabilities if the entity intends to realise the asset and settle the liability simultaneously. True False

21.	A change in tax rates does not require any change in the carrying amount of deferred tax assets and deferred tax liabilities. True False

22.

AASB 112 uses what term to describe the method for accounting for taxes that it mandates?

A.	net balances method

B.	financial position method

C.	asset and liability method

D.	balance sheet method

23.

The AASB 112 approach has been adopted because:

A.	it matches the revenues earned with tax payable on those revenues.

B.	it is conservative.

C.	it is considered consistent with the AASB Conceptual Framework.

D.	it is considered acceptable by the ATO.

24.

The generally accepted (a) accounting rule and (b) tax rule for development expenditure are:

A.	(a) capitalise and amortise; (b) a tax deduction when paid for.

B.	(b) expense when paid for; (b) a tax deduction when paid for.

C.	(c) capitalise and amortise; (b) a tax deduction when amortised.

D.	(d) expense when paid for; (b) a tax deduction when amortised.

25.

The amount of tax assessed by the ATO based on the entity's operations for the period will be reflected in which account?

A.	income tax expense

B.	deferred income tax

C.	deferred tax liability

D.	income tax payable

26.

Some items are treated as a deduction for tax purposes when they are paid but are recognised as expenses when they are accrued for accounting purposes. Which of the following items are of that type?

A.	long-service leave

B.	goodwill amortisation

C.	depreciation

D.	entertainment

27.

Some items are typically not allowable tax deductions but are recognised as an expense for accounting purposes. Which of the following items are of that type?

A.	research and development costs

B.	warranty costs

C.	sick leave payments

D.	goodwill amortisation

28.

The tax base is defined in AASB 112 as:

A.	the amount of assessable income for the period.

B.	the tax rate applicable to income levels under $60 000.

C.	the amount that is attributed to an asset or liability for tax purposes.

D.	the head office of the Australian Taxation Office in Canberra.

29.

A taxable temporary difference is one that will result in:

A.	an increase in income tax payable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

B.	a decrease in income tax payable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

C.	an increase in income tax recoverable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

D.	a decrease in income tax payable in future reporting periods when the carrying amount of the asset or liability is recovered or settled and an increase in income tax recoverable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

30.

A deductible temporary difference is one that will result in:

A.	a decrease in income tax recoverable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

B.	an increase in income tax payable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

C.	a decrease in income tax recoverable in future reporting periods when the carrying amount of the asset or liability is recovered or settled, and an increase in income tax payable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

D.	a decrease in income tax payable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

31.

Under the approach of AASB 112 to accounting for income taxes, a taxable temporary difference creates which account?

A.	provision for tax payable

B.	deferred tax asset

C.	general reserve

D.	deferred tax liability

32.

Under the approach of AASB 112 to accounting for income taxes, a deductible temporary difference creates which account?

A.	deferred tax revenue

B.	deferred tax liability

C.	deferred tax asset

D.	provision for tax payable

33.

Tissues Ltd has a depreciable asset that is estimated for accounting purposes to have a useful life of 8 years. For taxation purposes the useful life is 5 years. The asset was purchased at the beginning of year 1, there is no residual value, and the straight-line method of depreciation is used for both tax and accounting purposes. The tax rate is 30% and the cost of the asset is $100 000. What is the amount of the deferred tax liability account generated by this asset at the end of years 1, 2 and 3?

A.	End of year 1 $0; year 2 $2250; year 3: $4500

B.	End of year 1 $7500; year 2 $15,000; year 3: $22 500

C.	End of year 1 $6750; year 2 $4500; year 3: $2250

D.	End of year 1 $2250; year 2 $4500; year 3: $6750

34.

Snifful Industries has a depreciable asset that is estimated for accounting purposes to have a useful life of 7 years. For taxation purposes the useful life is 3 years. The asset was purchased at the beginning of year 1, there is no residual value, and the straight-line method of depreciation is used for both tax and accounting purposes. The tax rate is 30% and the cost of the asset is $210 000. What is the amount of the deferred tax liability account generated by this asset at the end of years 2, 3 and 4?

A.	End of year 2: $24 000; year 3: $36 000; year 4: $27 000

B.	End of year 2: $80 000; year 3: $120 000; year 4: $90 000

C.	End of year 2: $12 000; year 3: $24 000; year 4: $36 000

D.	End of year 2: $12 000; year 3: $12 000; year 4: $(9000)

35.

Sinfonia Ltd made credit sales for this period of $100 000. The allowance for doubtful debts for these sales is $3000. For taxation purposes the amount provided for doubtful debts is not tax-deductible and the taxation office has included the $100 000 in taxable income. The tax rate is 30%. What is the deferral arising from this situation?

none

B.	deferred tax liability of $900

C.	deferred tax asset of $900

D.	deferred tax liability of $3000

36.

A company has a loan with a carrying value of $60 000. The payment of the loan is not deductible for tax purposes. The tax rate is 30%. What is the tax base for this item?

$60 000

$18 000

$78 000

37.

A company has received $40 000 for subscription revenue in advance and recorded a liability account 'revenue received in advance'. Revenue is taxed when it is received. The tax rate is 30%. What is the tax base for this item?

$40 000

$12 000

$36 000

38.

A deferred tax asset arises if:

A.	the carrying amount of an asset is greater than its tax base

B.	the carrying amount of a liability is greater than its tax base

C.	the carrying amount of a liability is less than its tax base

D.	the carrying amount of an asset is greater than its tax base and the carrying amount of a liability is less than its tax base

39.

The correct method for calculating the amount of a deferred tax liability or asset may be expressed as a formula as follows:

A.	(Carrying amount of assets or liabilities – tax bases of assets or liabilities) × tax rate

B.	Carrying amount of assets or liabilities – (tax bases of assets or liabilities × tax rate)

C.	Carrying amount of assets or liabilities – tax bases of assets or liabilities × tax rate

D.	Carrying amount of assets or liabilities – tax bases of assets or liabilities

41.

Raging Dragons Ltd has a depreciable asset that is estimated for accounting purposes to have a useful life of 15 years. For taxation purposes the useful life is 10 years. The asset was purchased at the beginning of year 1, there is no residual value, and the straight-line method of depreciation is used for both tax and accounting purposes. The tax rate is 30% and the cost of the asset is $150 000. What adjustment will be required to the deferred tax liability account in years 10 and 11?

A.	End of year 10 $1500; year 11 $1500

B.	End of year 10 $5000; year 11 $(10 000)

C.	End of year 10 $1500; year 11 $(3000)

D.	End of year 10 $15 000; year 11 $(3000)

44.

The criterion for recognising a deferred tax asset is that:

A.	it should be fully recognised if it is probable that future taxable amounts within the entity will be available against which the deductible temporary differences can be utilised.

B.	it should be recognised if it is possible that future taxable amounts within the entity will be available against which the deductible temporary differences can be utilised.

C.	it should be recognised to the extent, and only to the extent, that it is possible that future taxable amounts within the entity will be available against which the deductible temporary differences can be utilised.

D.	it should be recognised to the extent, and only to the extent, that it is probable that future taxable amounts within the entity will be available against which the deductible temporary differences can be utilised.

45.

The tax base of a liability must be calculated as the liability's carrying amount as at the reporting date, less any future deductible amounts and plus any future assessable amounts that are expected to arise from settling the liability's carrying amount as at the reporting date. The exception to this rule is that:

A.	In the case of revenue received in advance, the tax base must be calculated as the liability's carrying amount less any amount of the revenue received in advance that has been included in taxable amounts in the current or a previous reporting period.

B.	In the case of carry forward tax losses, the tax base must be adjusted for any consideration paid by a company within the group that is receiving the transferred tax loss.

C.	In the case of a downward revaluation of a non-current asset, the tax base must be calculated as the decrease in the asset plus any amount expected to be received in the future inflated by the index for capital gains tax.

D.	In the case of a warranty liability, the tax base must be calculated as the liability's carrying amount less any amounts paid out this period that have not been included in taxable amounts in the current period.

47.

Some items are typically not allowable tax deductions but are recognised as an expense for accounting purposes. Which of the following items are of that type?

A.	research and development costs

B.	warranty costs

C.	sick leave payments

D.	entertainment

48.

The amount of tax calculated based on the entity's operations for the period will be reflected in which account?

A.	income tax expense

B.	deferred income tax

C.	deferred tax liability

D.	income tax payable

51.

Recognising deferred tax assets and deferred tax liabilities as per AASB 112 creates some conflict with the definition of assets and liabilities in the AASB Conceptual Framework. Key issues in this regard are:

A.	It is questionable whether or not the company controls the benefits from the deferred tax asset, and there is not a present obligation to transfer the funds represented in the deferred tax liability to the government.

B.	The company really has no claim against the government for the amount of the deferred tax asset and it is not probable that the company will have to pay the deferred tax liability.

C.	Setting off the deferred tax asset and deferred tax liability does not meet the requirements of the AASB Conceptual Framework and there is a contingent element involved in the recognition of the deferred tax asset.

The AASB Conceptual Framework does not permit the recognition of the rights to future revenues implicit in assets to trigger obligations to future expenses implicit in liabilities and the extent to which a deferred tax liability is recognised should not depend on management's intention to sell a revalued asset.

52.

The balance sheet approach adopted in AASB 112:

A.	will continue to be used as the alternatives are too simplistic.

B.	will only be understood by the very sophisticated financial readers.

C.	uses existing statement of financial position data thus reducing record keeping costs.

D.	will only be understood by the very sophisticated financial readers and uses existing statement of financial position data thus reducing record keeping costs.

53.

When the carrying amount of an asset exceeds the tax base, there will be a deferred tax , because the taxation payments have effectively been .

A.	asset; made in advance of recognising the expense

B.	asset; deferred to future periods

C.	liability; made in advance of recognising the expense

D.	liability; deferred to future periods

54.

Temporary differences:

A.	arise due to differences between income tax legislation and accounting rules, in a particular period, and are reversed in subsequent periods.

B.	can be both deductible temporary differences or taxable temporary differences.

C.	must be considered, and accounted for, by the creation of deferred tax asset and liabilities for all statement of financial position items (e.g. including asset revaluations), rather than just statement of comprehensive income items, which is a major change created by the new standard.

D.	arise due to changes in the income tax rate.

57.

Criteria used by an entity to assess the probability that taxable profit will be available against which unused tax losses can be utilised include:

A.	whether the unused tax losses result from identifiable causes that are unlikely to recur.

B.	whether it is probable that the entity will have taxable profits before the unused tax losses expire.

C.	whether permission has been received from the Australian Taxation Office to carry forward tax losses.

D.	whether the entity has unused tax losses relating to the same taxation authority and the same taxable entity, which will result in taxable amounts against which the unused tax losses can be utilised before they expire.

58.

The carrying amount of a deferred tax asset is reviewed:

annually

B.	at each reporting date

C.	when assets are revalued

D.	None of the given answers are correct.

59.

Which of the following statements is not correct in relation to tax rate changes?

A.	An increase in tax rates will create an expense where an entity has deferred tax liabilities.

B.	Across time it is likely that governments will change tax rates.

C.	A decrease in tax rates will create an income where an entity has deferred tax assets.

D.	Changes in tax rates will have implications for the value attributed to pre-existing deferred tax assets.

60.

The carrying amount of deferred tax assets and deferred tax liabilities can change:

A.	with a change in the amount of the related temporary differences.

B.	even if there is no change in the amount of the related temporary differences.

C.	with a re-assessment of the recoverability of deferred tax liabilities.

D.	with a change in the amount of the related temporary differences and even if there is no change in the amount of the related temporary differences.

62.

If a tax rate change from 30% to 25% results in an adjustment to the deferred tax liability account of $50 000, what is (a) the amount of the temporary differences and (b) the type of temporary differences?

A.	(a) $ 1 000 000; (b) taxable temporary differences

B.	(a) $ 1 000 000; (b) deductible temporary differences

C.	(a) $ 50 000; (b) taxable temporary differences

D.	(a) $ 50 000; (b) deductible temporary differences

63.

Which of the following statements is correct with respect to AASB 112 Income Taxes when the government increase tax rates?

A.	The entity applies a prospective application to deferred tax assets and deferred tax liabilities initially recognised subsequent to the announcement of the tax change.

B.	Expense is recognised if the entity has deferred tax liabilities only.

C.	Income is recognised if the entity has deferred tax liabilities only.

D.	Expense is recognised if the entity has deferred tax assets only.

64.

Which of the following statements is correct with respect to AASB 112 Income Taxes when a non-current asset is revalued?

A.	On revaluation date, the revaluation reserve is increased by the product of the temporary difference and the tax rate.

B.	On revaluation date, the revaluation reserve is decreased by the product of the temporary difference and the tax rate.

C.	On revaluation date, a deferred tax liability is created equal to the amount of the temporary difference.

D.	On revaluation date, a deferred tax asset is created equal to the amount of the temporary difference.

65.

What is the accounting treatment for goodwill that is consistent with AASB 112 Income Taxes?

A.	treated as a deductible expense in the year of recognition

B.	treated as a non-deductible expense in the year of recognition and subsequent periods

C.	the difference between the carrying amount and the tax base results to a taxable temporary difference

D.	the difference between the carrying amount and the tax base results to a deductible temporary difference

66.

On 1 January 2012, William Bay Ltd purchased a machine for $100 000. The entity adopts a straight-line depreciation method and uses 10% and 15% as depreciation rate and tax rate respectively. The salvage value is zero and the tax rate is 30%.
At 31 December 2012, which of the following statements is correct with respect to the transaction that is in accordance with AASB 112 Income Taxes only?

A.	There is a deductible temporary difference of $5000.

B.	There is a deductible temporary difference of $1500.

C.	There is a taxable temporary difference of $5000.

D.	There is a taxable temporary difference of $1500.

68.

A.	warranty costs

B.	goodwill amortisation

C.	depreciation

D.	entertainment

69.

The reversal of deductible temporary differences results in deductions in determining the:

A.	income tax expense

B.	future taxable profits

C.	carrying amounts

D.	income tax payable

70.

When considering the recognition of assets and liabilities for tax purposes, reference is made to the:

A.	depreciation rate

B.	carrying amount

tax base

D.	historical cost

71.

The accounting profit multiplied by the tax rate is known as:

A.	income tax payable

B.	income tax expense

C.	taxable amount

D.	assessable amount

72.	72 . How is taxable profit derived? How can it be calculated by starting with, and adjusting, accounting profit?

73.	How do deferred tax assets and deferred tax liabilities arise? How do you calculate their balances at a point in time?

74.	Discuss the criteria for recognising deferred tax assets when there are unused tax losses?

75.	Discuss the assumptions made when recognising a deferred tax asset or a deferred tax liability.

76.	Explain, with examples, how changes in tax rates affect pre-existing deferred tax asset and deferred tax liability balances.

77.	Evaluate deferred tax assets and deferred tax liabilities in terms of the AASB Conceptual Framework and the notion that they fail to meet the criteria outlined in the Framework.

78.	Discuss how the carrying amounts of deferred tax assets and liabilities may change even though there are no changes in the amount of the underlying temporary differences.

79.	Explain how a deferred tax liability arises from depreciation of machinery and equipment.

80.	Discuss the accounting treatment for the temporary difference that arises from revaluation of non-current assets.

81.	Discuss the conditions that must be met to allow the set-off of current assets and current tax liabilities.

Key

1.	The tax base of revenue received in advance is equal to zero where the revenue received is taxed in the reporting period that the revenue is received. TRUE

Chapter - Chapter 18 #1
Difficulty: Easy
Section: 18.02 Tax base of assets and liabilities, further consideration

2.	Deferred tax assets are the amounts of income taxes recoverable in future periods that arise from assessable temporary differences. FALSE

Chapter - Chapter 18 #2
Difficulty: Easy
Section: 18.03 Deferred tax assets and deferred tax liabilities

3.	Deferred tax assets may arise from amounts of income taxes recoverable in future periods that arise from carry forward of unused tax losses. TRUE

Chapter - Chapter 18 #3
Difficulty: Easy
Section: 18.04 Unused tax losses

4.	The balance sheet approach compares the carrying value with the tax base of the assets and liabilities. TRUE

Chapter - Chapter 18 #4
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

5.	Non-deductible expenses in the current or subsequent periods results in a deferred tax asset. FALSE

Chapter - Chapter 18 #5
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

6.	The tax-effect of the temporary difference that arises from revaluation of non-current assets is recognised in profit and loss. FALSE

Chapter - Chapter 18 #6
Difficulty: Medium
Section: 18.05 Revaluation of non-current assets

7.	It is possible for a firm to legally make a large accounting profit but pay little or no tax based on its taxable income. TRUE

Chapter - Chapter 18 #7
Difficulty: Easy
Section: Introduction to accounting for income taxes

8.	Profit for taxation purposes is determined in accordance with AASB 112. FALSE

Chapter - Chapter 18 #8
Difficulty: Easy
Section: Introduction to accounting for income taxes

9.	The difference between the carrying amount of an asset or liability in the balance sheet and its tax base is a temporary difference. TRUE

Chapter - Chapter 18 #9
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

10.	There are two types of temporary differences between the carrying value of assets and liabilities and the tax base—assessable temporary differences and neutral temporary differences. FALSE

Chapter - Chapter 18 #10
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

11.	The tax figure calculated and recorded on the statement of comprehensive income is an accurate reflection of the entity's tax liability for the stated period. FALSE

Chapter - Chapter 18 #11
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

12.	The balance sheet approach to accounting for taxation relies on comparing the historical cost of an item with its appropriate tax base. FALSE

Chapter - Chapter 18 #12
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

13.	When the carrying amount of an asset exceeds its tax base, the amount that will be allowed as a deduction for tax purposes will exceed the amount of assessable economic benefits. FALSE

Chapter - Chapter 18 #13
Difficulty: Medium
Section: 18.01 The balance sheet approach to accounting for taxation

14.	Under AASB 112, where the carrying amount of an asset is less than the amount that is economically recoverable, the deferred tax asset should be adjusted. FALSE

Chapter - Chapter 18 #14
Difficulty: Medium
Section: 18.02 Tax base of assets and liabilities, further consideration

15.	According to AASB 112, with one exception, the tax base of a liability is to be determined in the following manner: Carrying amount – Future deductible amount + Future assessable amount. TRUE

Chapter - Chapter 18 #15
Difficulty: Easy
Section: 18.02 Tax base of assets and liabilities, further consideration

16.	AASB 112 defines the tax base as the amount that is attributed to an asset or liability for tax purposes. TRUE

Chapter - Chapter 18 #16
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

17.	Deferred tax assets arise as a result of tax losses. In Australia losses incurred in previous years can always be carried forward to offset taxable income derived in future years. FALSE

Chapter - Chapter 18 #17
Difficulty: Easy
Section: 18.04 Unused tax losses

18.	When a non-current asset is revalued the tax base is not affected as depreciation for tax purposes will continue to be based on original cost. TRUE

Chapter - Chapter 18 #18
Difficulty: Easy
Section: 18.05 Revaluation of non-current assets

19.	When a non-current asset is revalued, the recognition of future tax associated with an asset that has a fair value in excess of cost, acts to reduce the amount of the revaluation reserve. TRUE

Chapter - Chapter 18 #19
Difficulty: Easy
Section: 18.05 Revaluation of non-current assets

20.	AASB 112 required an entity to offset current tax assets and current tax liabilities if the entity intends to realise the asset and settle the liability simultaneously. TRUE

Chapter - Chapter 18 #20
Difficulty: Medium
Section: 18.06 Offsetting deferred tax liabilities and deferred tax assets

21.	A change in tax rates does not require any change in the carrying amount of deferred tax assets and deferred tax liabilities. FALSE

Chapter - Chapter 18 #21
Difficulty: Easy
Section: 18.07 Change of tax rates

22.

AASB 112 uses what term to describe the method for accounting for taxes that it mandates?

A.	net balances method

B.	financial position method

C.	asset and liability method

D.	balance sheet method

Chapter - Chapter 18 #22
Difficulty: Easy
Section: Introduction to accounting for income taxes

23.

The AASB 112 approach has been adopted because:

A.	it matches the revenues earned with tax payable on those revenues.

B.	it is conservative.

C.	it is considered consistent with the AASB Conceptual Framework.

D.	it is considered acceptable by the ATO.

Chapter - Chapter 18 #23
Difficulty: Easy
Section: Introduction to accounting for income taxes

24.

The generally accepted (a) accounting rule and (b) tax rule for development expenditure are:

A.	(a) capitalise and amortise; (b) a tax deduction when paid for.

B.	(b) expense when paid for; (b) a tax deduction when paid for.

C.	(c) capitalise and amortise; (b) a tax deduction when amortised.

D.	(d) expense when paid for; (b) a tax deduction when amortised.

Chapter - Chapter 18 #24
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

25.

The amount of tax assessed by the ATO based on the entity's operations for the period will be reflected in which account?

A.	income tax expense

B.	deferred income tax

C.	deferred tax liability

D.	income tax payable

Chapter - Chapter 18 #25
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

26.

A.	long-service leave

B.	goodwill amortisation

C.	depreciation

D.	entertainment

Chapter - Chapter 18 #26
Difficulty: Medium
Section: 18.01 The balance sheet approach to accounting for taxation

27.

Some items are typically not allowable tax deductions but are recognised as an expense for accounting purposes. Which of the following items are of that type?

A.	research and development costs

B.	warranty costs

C.	sick leave payments

D.	goodwill amortisation

Chapter - Chapter 18 #27
Difficulty: Medium
Section: 18.01 The balance sheet approach to accounting for taxation

28.

The tax base is defined in AASB 112 as:

A.	the amount of assessable income for the period.

B.	the tax rate applicable to income levels under $60 000.

C.	the amount that is attributed to an asset or liability for tax purposes.

D.	the head office of the Australian Taxation Office in Canberra.

Chapter - Chapter 18 #28
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

29.

A taxable temporary difference is one that will result in:

A.	an increase in income tax payable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

B.	a decrease in income tax payable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

C.	an increase in income tax recoverable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

D.	a decrease in income tax payable in future reporting periods when the carrying amount of the asset or liability is recovered or settled and an increase in income tax recoverable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

Chapter - Chapter 18 #29
Difficulty: Medium
Section: 18.01 The balance sheet approach to accounting for taxation

30.

A deductible temporary difference is one that will result in:

A.	a decrease in income tax recoverable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

B.	an increase in income tax payable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

C.	a decrease in income tax recoverable in future reporting periods when the carrying amount of the asset or liability is recovered or settled, and an increase in income tax payable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

D.	a decrease in income tax payable in future reporting periods when the carrying amount of the asset or liability is recovered or settled.

Chapter - Chapter 18 #30
Difficulty: Medium
Section: 18.01 The balance sheet approach to accounting for taxation

31.

Under the approach of AASB 112 to accounting for income taxes, a taxable temporary difference creates which account?

A.	provision for tax payable

B.	deferred tax asset

C.	general reserve

D.	deferred tax liability

Chapter - Chapter 18 #31
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

32.

Under the approach of AASB 112 to accounting for income taxes, a deductible temporary difference creates which account?

A.	deferred tax revenue

B.	deferred tax liability

C.	deferred tax asset

D.	provision for tax payable

Chapter - Chapter 18 #32
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

33.

A.	End of year 1 $0; year 2 $2250; year 3: $4500

B.	End of year 1 $7500; year 2 $15,000; year 3: $22 500

C.	End of year 1 $6750; year 2 $4500; year 3: $2250

D.	End of year 1 $2250; year 2 $4500; year 3: $6750

Chapter - Chapter 18 #33
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

34.

A.	End of year 2: $24 000; year 3: $36 000; year 4: $27 000

B.	End of year 2: $80 000; year 3: $120 000; year 4: $90 000

C.	End of year 2: $12 000; year 3: $24 000; year 4: $36 000

D.	End of year 2: $12 000; year 3: $12 000; year 4: $(9000)

Chapter - Chapter 18 #34
Difficulty: Hard
Section: 18.01 The balance sheet approach to accounting for taxation

35.

none

B.	deferred tax liability of $900

C.	deferred tax asset of $900

D.	deferred tax liability of $3000

Chapter - Chapter 18 #35
Difficulty: Medium
Section: 18.02 Tax base of assets and liabilities, further consideration

36.

A company has a loan with a carrying value of $60 000. The payment of the loan is not deductible for tax purposes. The tax rate is 30%. What is the tax base for this item?

$60 000

$18 000

$78 000

Chapter - Chapter 18 #36
Difficulty: Medium
Section: 18.02 Tax base of assets and liabilities, further consideration

37.

$40 000

$12 000

$36 000

Chapter - Chapter 18 #37
Difficulty: Medium
Section: 18.02 Tax base of assets and liabilities, further consideration

38.

A deferred tax asset arises if:

A.	the carrying amount of an asset is greater than its tax base

B.	the carrying amount of a liability is greater than its tax base

C.	the carrying amount of a liability is less than its tax base

D.	the carrying amount of an asset is greater than its tax base and the carrying amount of a liability is less than its tax base

Chapter - Chapter 18 #38
Difficulty: Medium
Section: 18.03 Deferred tax assets and deferred tax liabilities
Section: Summary

39.

The correct method for calculating the amount of a deferred tax liability or asset may be expressed as a formula as follows:

A.	(Carrying amount of assets or liabilities – tax bases of assets or liabilities) × tax rate

B.	Carrying amount of assets or liabilities – (tax bases of assets or liabilities × tax rate)

C.	Carrying amount of assets or liabilities – tax bases of assets or liabilities × tax rate

D.	Carrying amount of assets or liabilities – tax bases of assets or liabilities

Chapter - Chapter 18 #39
Difficulty: Easy
Section: 18.03 Deferred tax assets and deferred tax liabilities

41.

A.	End of year 10 $1500; year 11 $1500

B.	End of year 10 $5000; year 11 $(10 000)

C.	End of year 10 $1500; year 11 $(3000)

D.	End of year 10 $15 000; year 11 $(3000)

Chapter - Chapter 18 #41
Difficulty: Hard
Section: 18.02 Tax base of assets and liabilities, further consideration

44.

The criterion for recognising a deferred tax asset is that:

A.	it should be fully recognised if it is probable that future taxable amounts within the entity will be available against which the deductible temporary differences can be utilised.

B.	it should be recognised if it is possible that future taxable amounts within the entity will be available against which the deductible temporary differences can be utilised.

C.	it should be recognised to the extent, and only to the extent, that it is possible that future taxable amounts within the entity will be available against which the deductible temporary differences can be utilised.

D.	it should be recognised to the extent, and only to the extent, that it is probable that future taxable amounts within the entity will be available against which the deductible temporary differences can be utilised.

Chapter - Chapter 18 #44
Difficulty: Easy
Section: 18.03 Deferred tax assets and deferred tax liabilities

45.

A.	In the case of revenue received in advance, the tax base must be calculated as the liability's carrying amount less any amount of the revenue received in advance that has been included in taxable amounts in the current or a previous reporting period.

B.	In the case of carry forward tax losses, the tax base must be adjusted for any consideration paid by a company within the group that is receiving the transferred tax loss.

C.	In the case of a downward revaluation of a non-current asset, the tax base must be calculated as the decrease in the asset plus any amount expected to be received in the future inflated by the index for capital gains tax.

D.	In the case of a warranty liability, the tax base must be calculated as the liability's carrying amount less any amounts paid out this period that have not been included in taxable amounts in the current period.

Chapter - Chapter 18 #45
Difficulty: Easy
Section: 18.02 Tax base of assets and liabilities, further consideration

47.

Some items are typically not allowable tax deductions but are recognised as an expense for accounting purposes. Which of the following items are of that type?

A.	research and development costs

B.	warranty costs

C.	sick leave payments

D.	entertainment

Chapter - Chapter 18 #47
Difficulty: Medium
Section: 18.01 The balance sheet approach to accounting for taxation

48.

The amount of tax calculated based on the entity's operations for the period will be reflected in which account?

A.	income tax expense

B.	deferred income tax

C.	deferred tax liability

D.	income tax payable

Chapter - Chapter 18 #48
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

51.

A.	It is questionable whether or not the company controls the benefits from the deferred tax asset, and there is not a present obligation to transfer the funds represented in the deferred tax liability to the government.

B.	The company really has no claim against the government for the amount of the deferred tax asset and it is not probable that the company will have to pay the deferred tax liability.

C.	Setting off the deferred tax asset and deferred tax liability does not meet the requirements of the AASB Conceptual Framework and there is a contingent element involved in the recognition of the deferred tax asset.

Chapter - Chapter 18 #51
Difficulty: Medium
Section: 18.08 Evaluation of the assets and liabilities created by AASB 112

52.

The balance sheet approach adopted in AASB 112:

A.	will continue to be used as the alternatives are too simplistic.

B.	will only be understood by the very sophisticated financial readers.

C.	uses existing statement of financial position data thus reducing record keeping costs.

D.	will only be understood by the very sophisticated financial readers and uses existing statement of financial position data thus reducing record keeping costs.

Chapter - Chapter 18 #52
Difficulty: Easy
Section: 18.08 Evaluation of the assets and liabilities created by AASB 112

53.

When the carrying amount of an asset exceeds the tax base, there will be a deferred tax , because the taxation payments have effectively been .

A.	asset; made in advance of recognising the expense

B.	asset; deferred to future periods

C.	liability; made in advance of recognising the expense

D.	liability; deferred to future periods

Chapter - Chapter 18 #53
Difficulty: Medium
Section: 18.02 Tax base of assets and liabilities, further consideration

54.

Temporary differences:

A.	arise due to differences between income tax legislation and accounting rules, in a particular period, and are reversed in subsequent periods.

B.	can be both deductible temporary differences or taxable temporary differences.

C.	must be considered, and accounted for, by the creation of deferred tax asset and liabilities for all statement of financial position items (e.g. including asset revaluations), rather than just statement of comprehensive income items, which is a major change created by the new standard.

D.	arise due to changes in the income tax rate.

Chapter - Chapter 18 #54
Difficulty: Medium
Section: 18.01 The balance sheet approach to accounting for taxation

57.

Criteria used by an entity to assess the probability that taxable profit will be available against which unused tax losses can be utilised include:

A.	whether the unused tax losses result from identifiable causes that are unlikely to recur.

B.	whether it is probable that the entity will have taxable profits before the unused tax losses expire.

C.	whether permission has been received from the Australian Taxation Office to carry forward tax losses.

D.	whether the entity has unused tax losses relating to the same taxation authority and the same taxable entity, which will result in taxable amounts against which the unused tax losses can be utilised before they expire.

Chapter - Chapter 18 #57
Difficulty: Medium
Section: 18.04 Unused tax losses

58.

The carrying amount of a deferred tax asset is reviewed:

annually

B.	at each reporting date

C.	when assets are revalued

D.	None of the given answers are correct.

Chapter - Chapter 18 #58
Difficulty: Easy
Section: 18.04 Unused tax losses

59.

Which of the following statements is not correct in relation to tax rate changes?

A.	An increase in tax rates will create an expense where an entity has deferred tax liabilities.

B.	Across time it is likely that governments will change tax rates.

C.	A decrease in tax rates will create an income where an entity has deferred tax assets.

D.	Changes in tax rates will have implications for the value attributed to pre-existing deferred tax assets.

Chapter - Chapter 18 #59
Difficulty: Hard
Section: 18.07 Change of tax rates

60.

The carrying amount of deferred tax assets and deferred tax liabilities can change:

A.	with a change in the amount of the related temporary differences.

B.	even if there is no change in the amount of the related temporary differences.

C.	with a re-assessment of the recoverability of deferred tax liabilities.

D.	with a change in the amount of the related temporary differences and even if there is no change in the amount of the related temporary differences.

Chapter - Chapter 18 #60
Difficulty: Medium
Section: 18.07 Change of tax rates

62.

A.	(a) $ 1 000 000; (b) taxable temporary differences

B.	(a) $ 1 000 000; (b) deductible temporary differences

C.	(a) $ 50 000; (b) taxable temporary differences

D.	(a) $ 50 000; (b) deductible temporary differences

Chapter - Chapter 18 #62
Difficulty: Medium
Section: 18.07 Change of tax rates

63.

Which of the following statements is correct with respect to AASB 112 Income Taxes when the government increase tax rates?

A.	The entity applies a prospective application to deferred tax assets and deferred tax liabilities initially recognised subsequent to the announcement of the tax change.

B.	Expense is recognised if the entity has deferred tax liabilities only.

C.	Income is recognised if the entity has deferred tax liabilities only.

D.	Expense is recognised if the entity has deferred tax assets only.

Chapter - Chapter 18 #63
Difficulty: Medium
Section: 18.07 Change of tax rates

64.

Which of the following statements is correct with respect to AASB 112 Income Taxes when a non-current asset is revalued?

A.	On revaluation date, the revaluation reserve is increased by the product of the temporary difference and the tax rate.

B.	On revaluation date, the revaluation reserve is decreased by the product of the temporary difference and the tax rate.

C.	On revaluation date, a deferred tax liability is created equal to the amount of the temporary difference.

D.	On revaluation date, a deferred tax asset is created equal to the amount of the temporary difference.

Chapter - Chapter 18 #64
Difficulty: Medium
Section: 18.05 Revaluation of non-current assets

65.

What is the accounting treatment for goodwill that is consistent with AASB 112 Income Taxes?

A.	treated as a deductible expense in the year of recognition

B.	treated as a non-deductible expense in the year of recognition and subsequent periods

C.	the difference between the carrying amount and the tax base results to a taxable temporary difference

D.	the difference between the carrying amount and the tax base results to a deductible temporary difference

Chapter - Chapter 18 #65
Difficulty: Medium
Section: 18.01 The balance sheet approach to accounting for taxation

66.

A.	There is a deductible temporary difference of $5000.

B.	There is a deductible temporary difference of $1500.

C.	There is a taxable temporary difference of $5000.

D.	There is a taxable temporary difference of $1500.

Chapter - Chapter 18 #66
Difficulty: Medium
Section: 18.02 Tax base of assets and liabilities, further consideration

68.

A.	warranty costs

B.	goodwill amortisation

C.	depreciation

D.	entertainment

Chapter - Chapter 18 #68
Difficulty: Medium
Section: 18.01 The balance sheet approach to accounting for taxation

69.

The reversal of deductible temporary differences results in deductions in determining the:

A.	income tax expense

B.	future taxable profits

C.	carrying amounts

D.	income tax payable

Chapter - Chapter 18 #69
Difficulty: Medium
Section: 18.03 Deferred tax assets and deferred tax liabilities

70.

When considering the recognition of assets and liabilities for tax purposes, reference is made to the:

A.	depreciation rate

B.	carrying amount

tax base

D.	historical cost

Chapter - Chapter 18 #70
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

71.

The accounting profit multiplied by the tax rate is known as:

A.	income tax payable

B.	income tax expense

C.	taxable amount

D.	assessable amount

Chapter - Chapter 18 #71
Difficulty: Easy
Section: 18.01 The balance sheet approach to accounting for taxation

72.

72 . How is taxable profit derived? How can it be calculated by starting with, and adjusting, accounting profit?

Taxable profit is the profit derived by the entity determined by applying the current taxation rules. It will typically be different from accounting profit (which is derived by applying accounting standards). To work out taxable profit we have to make adjustments to accounting profit so that we remove the effect of differences between accounting rules and tax rules.
So to determine taxable profit we will adjust for those items of expense and income that are treated differently by taxation rules and accounting rules. For example, we will add back the depreciation calculated from an accounting perspective (using the principles provided in AASB 116 Property, Plant and Equipment), and then subtract the amount that would be allowed by the ATO as a deduction to allow us to arrive at taxable profit.
For more information refer to ‘The balance sheet approach to accounting for taxation'.

Chapter - Chapter 18 #72
Difficulty: Medium
Section: 18.01 The balance sheet approach to accounting for taxation

73.

How do deferred tax assets and deferred tax liabilities arise? How do you calculate their balances at a point in time?

Temporary differences lead to deferred tax assets or deferred tax liabilities. Temporary differences arise because of differences between thecarrying amount of an asset and its tax base. As previously defined, the tax base of an asset is the amount that is attributed to an asset or liability for tax purposes. The tax base represents the amount that an asset or liability would be recorded at if a statement of financial position were prepared applying taxation rules. In relation to the tax base of an asset, and accepting the above definition, the following formula can be applied:
Carrying amount + Future amount deductible for tax purposes – Future taxable economic benefits = Tax base
For more information refer to ‘Tax base of assets and liabilities: further consideration'.

Chapter - Chapter 18 #73
Difficulty: Easy
Section: 18.02 Tax base of assets and liabilities, further consideration

74.

Discuss the criteria for recognising deferred tax assets when there are unused tax losses?

Consistent with the test for deferred tax assets generated by temporary differences, deferred tax assets generated as a result of unused tax losses must also be able to satisfy the ‘probable' test before they are recognised. As paragraph 34 of AASB 112 states: A deferred tax asset shall be recognised arising from the carry forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised.
In relation to unused tax losses, paragraph 35 of AASB 112 further provides:
The criteria for recognising deferred tax assets arising from the carry forward of unused tax losses and tax credits are the same as the criteria for recognising deferred tax assets arising from deductible temporary differences. However, the existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, when an entity has a history of recent losses, the entity recognises a deferred tax asset arising from unused tax losses or tax credits only to the extent that the entity has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilised by the entity. In such circumstances, paragraph 82 requires disclosure of the amount of the deferred tax asset and the nature of the evidence supporting its recognition.
For more information refer to ‘Unused tax losses'.

Chapter - Chapter 18 #74
Difficulty: Medium
Section: 18.04 Unused tax losses

75.

Discuss the assumptions made when recognising a deferred tax asset or a deferred tax liability.

When recognising a deferred tax asset or a deferred tax liability, a number of assumptions are made. A key assumption is that the entity will remain in business (in other words it is a going concern) and that taxable income will be derived in future years. The recognition criteria for deferred tax assets are the same as those applied to other assets and rely on the ‘probable' test. AASB 112 provides the general rule that a deferred tax asset must be recognised for all deductible temporary differences that reflect the future tax consequences of transactions and other events that are recognised in the statement of financial position, to the extent that it is probable that future taxable amounts within the entity will be available against which the deductible temporary differences can be utilised. In this regard, paragraph 27 of AASB 112 states:
The reversal of deductible temporary differences results in deductions in determining the taxable profits of future periods. However, economic benefits in the form of reductions in tax payments will flow to the entity only if it earns sufficient taxable profits against which the deductions can be offset. Therefore, an entity recognises deferred tax assets only when it is probable that taxable profits will be available against which the deductible temporary differences can be utilised.
For more information refer to ‘Deferred tax assets and deferred tax liabilities'.

Chapter - Chapter 18 #75
Difficulty: Medium
Section: 18.03 Deferred tax assets and deferred tax liabilities

76.

Explain, with examples, how changes in tax rates affect pre-existing deferred tax asset and deferred tax liability balances.

Across time it is likely that governments will change tax rates. Changed tax rates will have implications for the value attributed to pre-existing deferred tax assets and deferred tax liabilities. For example, if an organisation has recognised a deferred tax asset relating to a previous loss for tax purposes and that previously carried-forward tax loss was $1 million, and the tax rate is increased from 30% to 35%, the amount of the deferred tax asset will need to be increased from $300 000 to $350 000. This is because when the organisation subsequently earns a taxable profit of $1 000 000 it will be able to offset the loss against the $350 000 in tax that would otherwise be payable under the revised tax rate. The $50 000 increase in the value of the deferred tax asset (which is calculated as $1 000 000 x [0.35 – 0.30]) would be treated as income, given that the carrying amount of the asset has been increased. Conversely, if the tax rate had been decreased, the value of the asset would be decreased and this would be recognised as an expense. An increase in tax rates will create an expense where an organisation has deferred tax liabilities, whereas a decrease in tax rates will create income in the presence of deferred tax liabilities. Where there are both deferred tax assets and deferred tax liabilities at the time of a change in tax rate, there will be both gains and losses (there will be a gain on the asset and a loss on the liability, or vice versa) and the net amount would be treated as either income or an expense.
For more information refer to ‘Change of tax rates'.

Chapter - Chapter 18 #76
Difficulty: Easy
Section: 18.07 Change of tax rates

77.

Evaluate deferred tax assets and deferred tax liabilities in terms of the AASB Conceptual Framework and the notion that they fail to meet the criteria outlined in the Framework.

Consider whether the asset ‘deferred tax asset' or the liability ‘deferred tax liability' as generated by tax-effect accounting actually meet the definitions provided within the AASB Conceptual Framework.
First, let us consider the deferred tax asset. As we know, an asset is defined as a ‘resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity'. At the end of the reporting period, the company really has no claim against the government for the value of the deferred tax asset. The realisation of the benefit will arise only if the company earns sufficient revenue in the future and if the relevant taxation legislation does not change. It is questionable whether the benefits are actually controlled by the entity at the end of the reporting period. There is arguably a contingent element involved.
With respect to the deferred tax liability, a liability is defined in the AASB Conceptual Framework as ‘a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits'. Where a deferred tax liability exists, the company is not currently obliged to transfer funds of an amount equal to the balance of the account. The funds will be transferred in the future only if the company earns sufficient revenue; that is, there is a dependency on future events, not past events. There is also the assumption that the relevant taxation legislation will not change.
For more information refer to ‘Evaluation of the assets and liabilities created by AASB 112'.

Chapter - Chapter 18 #77
Difficulty: Medium
Section: 18.08 Evaluation of the assets and liabilities created by AASB 112

78.	Discuss how the carrying amounts of deferred tax assets and liabilities may change even though there are no changes in the amount of the underlying temporary differences.

Chapter - Chapter 18 #78
Difficulty: Hard
Section: 18.07 Change of tax rates

79.

Explain how a deferred tax liability arises from depreciation of machinery and equipment.

From a taxation perspective specific depreciation rates might be stipulated that have no direct relationship to the useful life of an asset (accelerated depreciation rates may be offered by the government to stimulate investment in particular assets). It is necessary to add back the depreciation calculated from an accounting perspective (using the principles provided in AASB 116 Property, Plant and Equipment), and then subtract the amount that would be allowed by the ATO as a deduction to allow us to arrive at taxable profit. This gives rise to a deferred tax liability.
The excess of the tax depreciation over accounting depreciation in the first four years reduces the taxable profit, and thus the taxes that have to be paid and no depreciation is deductible in the fifth year (for taxation purposes, the asset is fully depreciated at the end of the fourth year and has a tax base of zero), meaning that to determine taxable profit the accounting depreciation has to be added back with no offset of the tax depreciation. Effectively, the entity is given an ‘extra' deduction in years 1 to 4, which it will have to give back in year 5. There is in effect a ‘timing difference'.
A deferred liability is considered to exist throughout the life of the asset and at the end of five years the total, depreciation for accounting purposes equals the total depreciation allowed for tax purposes. Any differences in total depreciation throughout the five years are of a temporary nature. Once the additional taxation is paid in year 5, the deferred tax liability will no longer exist.
For more information refer to ‘The balance sheet approach to accounting for taxation'.

Chapter - Chapter 18 #79
Difficulty: Medium
Section: 18.01 The balance sheet approach to accounting for taxation

80.

Discuss the accounting treatment for the temporary difference that arises from revaluation of non-current assets.

AASB 112 requires that, to the extent that the deferred tax relates to amounts that were previously recognised in equity as either direct credits or direct debits (as is the case for upward asset revaluations), the journal entry to recognise the deferred tax asset or liability must also be adjusted against the equity account. As paragraph 61 of AASB 112 stipulates:
Current tax and deferred tax shall be charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly to equity.
Given that the revaluation is adjusted against equity (revaluation surplus), the accounting entry to record the recognition of the deferred tax liability would therefore be:
Dr Revaluation surplus and Cr Deferred tax liability
Hence the recognition of the future tax associated with an asset that has a fair value in excess of its cost, as recognised by a revaluation, acts to reduce the amount of the revaluation surplus (and, therefore, the amount of equity). The above entries assume that the revalued amount of the asset will be recovered by the entity's continued use of the asset.
For more information refer to ‘Revaluation of non-current assets'.

Chapter - Chapter 18 #80
Difficulty: Hard
Section: 18.05 Revaluation of non-current assets

81.	Discuss the conditions that must be met to allow the set-off of current assets and current tax liabilities.

Chapter - Chapter 18 #81
Difficulty: Hard
Section: 18.06 Offsetting deferred tax liabilities and deferred tax assets

Chapter 18 Summary

Category	# of Questions
Chapter - Chapter 18	81
Difficulty: Easy	35
Difficulty: Hard	11
Difficulty: Medium	35
Section: 18.01 The balance sheet approach to accounting for taxation	28
Section: 18.02 Tax base of assets and liabilities, further consideration	12
Section: 18.03 Deferred tax assets and deferred tax liabilities	11
Section: 18.04 Unused tax losses	6
Section: 18.05 Revaluation of non-current assets	7
Section: 18.06 Offsetting deferred tax liabilities and deferred tax assets	2
Section: 18.07 Change of tax rates	8
Section: 18.08 Evaluation of the assets and liabilities created by AASB 112	3
Section: Introduction to accounting for income taxes	4
Section: Summary	1

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