FAC3701
Assignment 1
Semester 1
2021
Unique #772693
, Question a
The SA Revenue Service doesn't allow a tax allowance on the administration
building which means the difference in the carrying amount and the tax base
resulting from the depreciation provided on the building will be regarded as an
exempt difference. The temporary difference on the administration building is
exempt in terms of paragraph 15 of IAS 12 as it arises from the initial
recognition of an asset in a transaction which at the time of the transaction
affects neither accounting nor taxable profit / loss.
Exempt differences are items that are never taxable nor tax deductible and
therefore no tax is provided on them. Exempt differences do not result in
deferred tax implications, hence there will be no deferred tax on the
administration property.
Assignment 1
Semester 1
2021
Unique #772693
, Question a
The SA Revenue Service doesn't allow a tax allowance on the administration
building which means the difference in the carrying amount and the tax base
resulting from the depreciation provided on the building will be regarded as an
exempt difference. The temporary difference on the administration building is
exempt in terms of paragraph 15 of IAS 12 as it arises from the initial
recognition of an asset in a transaction which at the time of the transaction
affects neither accounting nor taxable profit / loss.
Exempt differences are items that are never taxable nor tax deductible and
therefore no tax is provided on them. Exempt differences do not result in
deferred tax implications, hence there will be no deferred tax on the
administration property.
