IAS 12 - Income Taxes Quiz

Deferred Tax Liabilities Arise From? (Choose the Correct Answer)

• Deductible Temporary Differences

• Taxable Temporary Differences

• Permanent Differences

• Tax Losses

A temporary difference is? (Choose the correct answer)

• A difference between taxable profit and accounting profit that will reverse in future periods

• A difference between taxable profit and accounting profit that will never reverse

• A difference between tax rates

• A difference between tax payments

Deferred Tax Income and Expense are calculated using?

• Current tax rates

• Tax rates expected to apply when the asset is realized or the liability is settled

• Historical Tax Rates

• Average tax rates

The tax base of an asset is?

• The carrying amount of the asset

• The fair value of the asset

• The amount that will be deductible for tax purposes against any taxable economic benefits

• The original cost of the asset

IAS 12 requires that deferred tax relating to items recognized outside profit or loss is recognized:

• In profit or loss

• Outside profit or loss, in other comprehensive income or directly in equity

• Only in the notes to the financial statements

• Never

The Carrying Value of an asset is?

• The original cost of the asset

• The fair value of the asset

• The tax base of the asset

• The amount at which an asset is recognized after deducting any accumulated depreciation and accumulated impairment losses

Which of the following is an example of taxable temporary differences that can create a deferred tax liability?

• Accrued Expenses

• Warranty Provisions

• Depreciation Differences

• Unused Tax Losses

The recognition of a deferred tax liability is required for:

• All taxable temporary differences, with limited exceptions.

• Only significant taxable temporary differences.

• Only taxable temporary differences that are expected to reverse in the next year.

• Only taxable temporary differences related to non-current assets.

What is the affect of an increase in the tax rate upon a deferred tax liability?

• The Deferred tax liability decreases.

• The Deferred tax liability increases.

• The Deferred tax liability stays the same.

• There is no effect.

If an asset is revalued upwards, and the revaluation is not taxable, what type of temporary difference arises?

• Permanent difference

• Taxable temporary difference

• No temporary difference

• Deductible Temporary Difference