CAF-6 · Chapter 7 · Question 14 of 15
Which of the following would be considered a 'Permanent Difference' (though IAS 12 focuses on temporary ones)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Fines and penalties that are never tax-deductible.
Explanation
Permanent differences are items that enter into accounting profit but never into taxable profit (or vice versa), such as non-deductible fines. They do not give rise to deferred tax.
More IAS 12 Income Taxes MCQs
- Q1What is the 'Tax Base' of an asset?
- Q2A 'Taxable Temporary Difference' arises when:
- Q3Which of the following results in a 'Deferred Tax Liability'?
- Q4A deferred tax asset should be recognized for unused tax losses and unused tax credits to the extent that:
- Q5Deferred tax assets and liabilities should be measured using: