IFRS for SMEs) IFRS for SMEs Income Taxes and Deferred Tax 3

Question 1

Under IFRS for SMEs, which of the following is an example of a deductible temporary difference?

Accepted Answer

A warranty provision recognized in accounting but only deductible for tax when the warranty is paid

Answer

Accelerated tax depreciation greater than accounting depreciation

Answer

Revenue recognized in accounting before it is taxable

Answer

Revaluation gain on investment property

Question 2

Under IFRS for SMEs, what is the tax base of a liability?

Accepted Answer

Its carrying amount less any amount that will be deductible for tax purposes in future periods

Answer

The tax deduction already claimed on the liability

Answer

The carrying amount adjusted for deferred tax

Answer

Zero for all liabilities

Question 3

Under IFRS for SMEs, the total income tax expense presented in the income statement comprises:

Accepted Answer

Current tax expense plus deferred tax expense (or minus deferred tax income)

Answer

Only current tax paid during the period

Answer

Only deferred tax movements

Answer

Tax per the tax return plus penalties

Question 4

Under IFRS for SMEs, when property is revalued and the gain is taxable only on disposal, the deferred tax liability is calculated using:

Accepted Answer

The tax rate that would apply to the gain on disposal of the asset

Answer

The entity's marginal income tax rate

Answer

A rate of zero since property is tax-exempt

Answer

The rate applicable in the year of revaluation

Question 5

Under IFRS for SMEs, which of the following disclosures is required for income taxes?

Accepted Answer

The major components of income tax expense

Answer

A full effective tax rate reconciliation between statutory and effective rates

Answer

Names of all tax jurisdictions in which the entity files

Answer

Details of all tax assessments received

Question 6

Under IFRS for SMEs, when a deferred tax liability has been previously unrecognized under the initial recognition exemption, and later the exemption no longer applies, the entity should:

Accepted Answer

Recognize the deferred tax liability prospectively when the exemption ceases to apply

Answer

Restate all prior periods

Answer

Recognize it as an adjustment to goodwill

Answer

Disclose but not recognize it