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Company C has fixed asset book value of 226 (and max 226 in future book depreciation) in its financial statements but a...

Company C has fixed asset book value of 226 (and max 226 in future book depreciation) in its financial statements but a tax base of 89 (and max 89 in future tax-deductible depreciation) in its tax statements. What deferred tax liability value does IFRS initially require the company to disclose? Consider that the tax rate is 20%.

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Answer #1

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Given: Carring Amount (Book Value) of fixed asset = 226

Tax Base = 89

Deferred Tax Liability = (Carring Amount - Tax Base ) × Tax Rate

Deferred Tax Liability = ( 226 - 89 ) × 20 %

= 27.4

DEFERRED TAX LIABILITY 27.4
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