CAF-6 · Chapter 7 · Question 15 of 15
The measurement of deferred tax liabilities and assets should reflect the tax consequences that would follow from the manner in which the entity expects, at the end of the reporting period, to:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Recover or settle the carrying amount of its assets and liabilities.
Explanation
The deferred tax calculation must consider whether the entity expects to recover the asset through 'use' or through 'sale', as different tax rates or rules might apply.
More IAS 12 Income Taxes MCQs
- 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:
- Q6Which of the following is an example of an 'Exempt' temporary difference where no deferred tax is recognized at initial recognition?