IAS 12 – Income Taxes – Theory – 3

A deferred tax asset shall be recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised.

Which of the following examples result in deferred tax assets?

If a deferred tax liability or deferred tax asset arises from a non-depreciable asset measured using the revaluation model in IAS 16, the measurement of the deferred tax liability or deferred tax asset shall reflect the tax consequences of recovering the carrying amount of the non-depreciable asset through sale, regardless of the basis of measuring the carrying amount of that asset.

Which of the following can result is a change of the carrying amount of deferred tax assets and liabilities even though there is no change in the amount of the related temporary differences?

Under which circumstances does IAS 12 allow to offset current tax asset and current tax liability?

A machine cost $100. For tax purposes, depreciation of $30 has already been deducted in the current and prior periods and the remaining cost will be deductible in future periods, either as depreciation or through a deduction on disposal. Revenue generated by using the machine is taxable, any gain on disposal of the machine will be taxable and any loss on disposal will be deductible for tax purposes.

What is the tax base of the machine?

An asset, which cost $150, has a carrying amount of $100. Cumulative depreciation for tax purposes is $90 and the tax rate is 25%. What amount of deferred tax shall be recognised in respect to this asset?