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IAS 12: Deferred Tax - Coggle Diagram

- - - - amount deductible for TAX PURPOSES against the FUTURE EB when entity recovers the asset
      - IF EB are NOT taxbable ... TB = CA
    - - CA LESS amount deductible for tax purposes i.r.o liability in future periods
    - - CA - income NOT deductible in future
        
        IFRS 15 - Recognise WHEN PO performed
        NOT part of Profit
        
        TAX ACT - Taxed at earlier of:
        
        Receipt
        
        Accrual
        Amount taxed when it is received
  - - - Amounts included:
        
        Gross Profit
        
        Cost of Sales
        
        Wear & Tear
        
        Recoupment
      - Amounts excluded:
        
        Local dividends
        2.Depreciation
        3.Profit on Sale of Land (CGT)
        
        Fines & Penalties
  - - - Incl:
        
        Gross Profit
        
        Cost of Sales
        3.Depreciation
        
        Dividends
        5.Profit on Sale of Land
        
        Fines
      - Excl.
        
        Recoupment
        
        Fines
- - - - ADD: Amounts NOT allowed by SARS(Donations, Fines, Dividends)
      - SUBTRACT: Amounts considered by SARS in TAXABLE INCOME
        (CGT)
    - - ADD:
        Depreciation
        Taxable CGT
        Recoupment
        Impairment Losses
        Leave provision NOT paid (2023)
      - SUBTRACT:
        Wear & Tear
        Remain Acc profit (after not taxable CGT)
        Leave provision PAID current year (2022)
  - - - Tax Base
      - Carrying Amount
      - Temp. difference
        
        Asset-
        TD(Future taxable income) = CA (Future gross income/Sales proceeds) :no_entry: TB (Future deductions)
        
        Liability
        TD (benefit deductible in future) = CA (Deductions IFRS) :no_entry: TB (Amount NOT deductible i.t.o TAX)
    - - Assets
        
        Deferred tax Liability = CA greater TB :frowning_face:
        
        (Deferred Tax Asset = CA smaller TB) :smiley:
      - Liabilities
        
        Deferred Tax Liability = CA smaller than TB :frowning_face:
        
        (Deferred tax Asset = CA greater than TB) :smiley:
- - - - 80% is the amount of the CG that is taxable
      - 27% is the rate by which the 80% taxable gain will be taxed
    - - para 51B : Non-depreciable asset(land), revaluation model IAS 16 (21.6%)
      - para 51C: IP measured at FV (21.6%)
- - - - Pay more tax in future
      - Current TAX + Deferred tax (TD's x 27%) = DT Liability
        (What you owe SARS ADD the differences between ACC & TAX that means you are increasing the tax that we actually owe SARS
    - - Tax expense = Current tax LESS deferred Tax = DT Asset
      - Pay less in future
- - - - Eliminate ACC profit >>> substitute with taxable profit
        
        Step 1: Calculate TOTAL Acc profit
        Selling Price
        (Carrying Amount)
        = Accounting Profit
        
        Step 2: Calculate taxable profit
        Selling price (Ltd to cost)
        (Tax Base)
        = Recoupment
        Proceeds
        (Base Cost)
        = Capital gain
        
        Temporary difference = CGT @ 80%
        Add: Recoupment
        Less: Remaining Acc profit
        ADD: Taxable CG
        Less: S11e allowance
        Add; Depreciation
        
        Permanent difference = Remaining portion @ 20%
        deduct from Profit Before TAX >>> Can never be taxed