IAS 12 - Disclosure Overview for Income Taxes (IFRS)

[@accfirst9439]

This is very good. Many lecturers are struggling to teach deferred tax in an understandable way.

[@TabaldiEducation]

So glad it helped :)

[@joncoh101]

Living legend. Thank you sir

[@kaurie1234]

what do we mean by having “major component tax expense”

[@TabaldiEducation]

Hi, do you mind posting the time stamp you heard that term so I can check for you? :)

[@kaurie1234]

@@TabaldiEducation its the sub heading for the tax reconciliation note. I just want to understand what we mean by “major components of tax expenses”

[@TabaldiEducation]

@@kaurie1234 The "major components of tax expenses" in the context of a tax reconciliation note typically refers to the detailed breakdown of various types of taxes that a company incurs during a specific period. This can give stakeholders insight into how the company's effective tax rate is derived and the significant factors influencing its tax obligations. Here are some of the components that might be included under this heading: Current Tax Expense (or Benefit): This represents the amount of income taxes payable (or recoverable) to taxation authorities for the current year, based on the taxable income for the period. It's a reflection of the company's earnings that are subject to tax at the statutory rates applicable in the jurisdictions where it operates. Deferred Tax Expense (or Benefit): Deferred tax relates to the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. It also includes changes in tax rates or tax laws, the creation and release of valuation allowances against deferred tax assets, and adjustments to tax-exemption levels. Adjustments for Prior Periods: Sometimes, a company may need to adjust its tax expenses for errors or estimations made in previous periods. These adjustments are also included as part of the major components of tax expenses. Changes in Tax Rates or Laws: When tax rates or laws change, the impact on both current and deferred tax expenses is accounted for in this period. This can result in significant adjustments to the company's tax expense. Non-deductible Expenses: These are expenses that cannot be deducted from income for tax purposes. Examples include entertainment expenses beyond a certain limit, fines, and penalties. Tax Credits and Incentives: Governments often offer tax credits and incentives for certain activities, such as research and development, investment in certain assets, or operations in specific regions. The effect of these credits and incentives reduces the total tax expense. Withholding Taxes and Taxes on Dividends: Taxes withheld at source on interest, royalties, dividends, and other income, as well as taxes on dividends paid to shareholders, are also components of the overall tax expense.

[@kaurie1234]

@@TabaldiEducation You have NO IDEA HOW MUCH THIS IS GOING TO HELP ME❤️❤️😭😭 thank you so much for taking out the time to write this down in full and explain everything in detail. I am starting to see the bigger picture🥺

[@TabaldiEducation]

I am so glad we could help@@kaurie1234 All the best with your studies!! ;)

[@Agha-Talib]

Even in 2023 this guy is relevant

[@TabaldiEducation]

Thanks! Yes, many of these principles do not change.

[@PrincessZwo]

this is awesome thank you

[@TabaldiEducation]

+Zwonaka Thank you for your comment - we are glad you found benefit from these videos. The Tabaldi Team

[@eijaz852]

very useful ..wits student

[@TabaldiEducation]

Thanks for your comment. We are glad you find our videos useful.

[@drjesuselshaddai9537]

Tabaldi are you still there

[@TabaldiEducation]

Yes we are :)

[@MLee111]

Thank you!!!!