ADVANCED TAXATION



Advanced Taxation

Advanced Taxation

Part A

Introduction

The accounting model, based on the principle of priority of the economic substance of the facts reflected on their legal form, in particular, suggests the possibility of discrepancy between the values ??of accounting and taxable income, which is becoming a reality in the financial statements of companies on the one hand, there is the value of the financial result before tax, calculated by applying the accounting methodology, on the other hand, it does not coincide with the value of the company's liabilities for income tax and the corresponding payments in the budget. Such a discrepancy between the information, not facilitate an understanding of reporting its users, has led to the idea of ??a separate presentation of indicators related to the payment of tax on company profits, and in the framework of IFRS led to the emergence of standards for indicators related to income tax. This standard has introduced an additional deferred tax expense, calculated on the basis of the so-called "temporary differences" between accounting and taxable profits, which are determined by the fact that the income and expenses when calculating taxable profits and accounting are recognized in the account at different times.

The general meaning of the methodology of income tax determined by the IAS, is as follows: Income tax expense is an article recognized in the profit and loss account, which is divided into two components - current and deferred taxes (deferred) tax. Under the current tax is the sum of income taxes payable (or recoverable) on the taxable profit (tax loss) for the reporting period. The balance sheet reflects the unpaid portion of obligations or payments. Deferred tax is determined by the discrepancy between the values ??of accounting and taxable income.

The transition to the new method was adopted by the IAS in 1996 and came into force in 1998. This was due to the general nature of the methodological changes in IFRS, which became the main form of the balance sheet statement of financial position (balance sheet) and income and expense statement of comprehensive income is mainly measured by the dynamics of assets and liabilities of the balance, as defined in the "Principles" of IFRS. On this basis, the amount of deferred tax may be either consumption or income, depending on the nature of the changes during the period of deferred tax liabilities and assets. Thus, IFRS defines an article of deferred taxes in the income statement (the statement of comprehensive income) for the balance, and not due to deviations from the taxable profits of the accounting (before tax). The method is called the "liability method", and is based on the calculation and recognition of deferred tax balance sheet ratios.

Under IFRS, regardless of the maturity of liabilities (assets) to the deferred tax method of discounting the estimated values ??for the present value is not applicable. Deferred tax assets or liabilities in the reflected as long-term paper. Presentation of deferred taxes as working capital standard is prohibited.

The measurement of tax rate

Deferred tax arises from the dynamics of deferred liabilities (assets) during the reporting ...