FAC3701
ASSIGNMENT 1 (SEMESTER 2)
DUE DATE: 23 August 2024
Written Assignment Submission Guidelines:
Please ensure that your assignment is submitted electronically through the myUnisa platform no
later than …August 2024. Kindly note that fax or email submissions will not be accepted.
NB: Assignment submitted to the lecturer(s) through email will not be considered.
QUESTION 1
a) Calculate the deferred tax balance in the statement of financial position of TopStyle Ltd for
both the years ended 30 June 2022 and 30 June 2023, using the statement of financial position
approach. Indicate in your answer if the balance is a deferred tax asset or deferred tax liability.
Your answer must comply with the requirements of IAS 12, Income taxes.
ANSWER:
Deferred Tax Balance as at 30 June 2022:
1. Administration Building:
o Tax base = Cost - Tax depreciation = R1 500 000 - Rnil = R1 500 000
o Carrying amount (as per accounting) = R1 500 000 - Depreciation for 9 months (R1 500 000 /
15 years * 9/12) = R1 500 000 - R75 000 = R1 425 000
o Temporary difference = Carrying amount - Tax base = R1 425 000 - R1 500 000 = (R75 000)
o Deferred tax liability = Temporary difference * Tax rate = (R75 000) * 28% = R21 000 (liability)
ASSIGNMENT 1 (SEMESTER 2)
DUE DATE: 23 August 2024
Written Assignment Submission Guidelines:
Please ensure that your assignment is submitted electronically through the myUnisa platform no
later than …August 2024. Kindly note that fax or email submissions will not be accepted.
NB: Assignment submitted to the lecturer(s) through email will not be considered.
QUESTION 1
a) Calculate the deferred tax balance in the statement of financial position of TopStyle Ltd for
both the years ended 30 June 2022 and 30 June 2023, using the statement of financial position
approach. Indicate in your answer if the balance is a deferred tax asset or deferred tax liability.
Your answer must comply with the requirements of IAS 12, Income taxes.
ANSWER:
Deferred Tax Balance as at 30 June 2022:
1. Administration Building:
o Tax base = Cost - Tax depreciation = R1 500 000 - Rnil = R1 500 000
o Carrying amount (as per accounting) = R1 500 000 - Depreciation for 9 months (R1 500 000 /
15 years * 9/12) = R1 500 000 - R75 000 = R1 425 000
o Temporary difference = Carrying amount - Tax base = R1 425 000 - R1 500 000 = (R75 000)
o Deferred tax liability = Temporary difference * Tax rate = (R75 000) * 28% = R21 000 (liability)
