IAS 12 - Tax Base Definition of an Asset (IFRS)

[@kelvinpadman3466]

You are truly gifted. I will inform the lecturers in my college to pass the word around so you will get more views. Thank you for your contribution to the accounting world

[@TabaldiEducation]

I am glad you found it useful. We are working on getting out much more content like this with the "IFRS principles" free on you tube, and paid for courses on tabaldi.org.

[@gezzie123456789]

I couldnt quite grasp the concept, of the tax base of assets, in my study book. Thank goodness for this video. Great presentation, made it a lot easier to understand, and you spoke so well.

[@TabaldiEducation]

gezzie123456789 So glad we could help. We have our full course on IAS 12 up including some more complex issues such as assessed losses and changes in tax rate. www.tabaldi.org or if you prefer udemy search for IAS 12 on www.udemy.com

[@MrLaurentenzo]

Thank you tabaldiaccounting, I have been using your lessons for weeks now. So much better than the lectures they gave me at college

[@TabaldiEducation]

Thank you Laurent De Decker for your comment. We are please that you found our video lessons so helpful. Best wishes with all your studies. The Tabaldi Team

[@Kaizen_ant7]

Great videos! Is there any chance you can make a video in which you completely explain the Statement of changes in equity with examples??

[@TabaldiEducation]

Hi Raju, we are going to try and put up a "Practical IFRS" course one of these days that will include excel and programs such as Caseware. Great suggestion, thanks

[@mncedisisindane4529]

This guy is such a legend!!

[@yogihimalayan]

Thank you so much, the presentation is expressed in such a way that goes thru my mind and comprehend completely. I am doing CPA and doing Financial Reporting paper and realized IAS is full with jargon and difficult to understand. You bagged another token of appreciation from NZ. Keep it up mate.

[@winslm3878]

Thanks! tht's ws really helpful n clearly explained 😊

[@CA.Kashyapi]

Very precisely explained. I understood the concept very clearly. Thanks a lot Sir.

[@TabaldiEducation]

Thank you Kashyapi Palicha for your comment, we are please you benefited from our videos, and appreciate you took time to post a comment. Best wishes for your future studies this new year. The Tabaldi Team

[@pigslefats]

6:19 ..."not the future tax deductions"???

[@tejeshjaswanth9196]

Thank you sir. From India

[@rajuvetiyatil3922]

good presentation.. suggest to add a reference on how it can be done on an excel sheet..

[@salimschaikhossen4221]

Hi Richard, Very well explained. But I think there is one typo error on slide 2 definition of an asset as per IAS 12 p7 - line 3 : its better to say "if those FEB will not be taxable, then TB=CA". What do you think?

[@vincentlimvuisheng2802]

What if there is allowance for doubtful debts? What is the tax base for debtors?

[@vidyakarant9798]

What would the tax base be of interest receivable if for example interest receivable is taxed on cash basis ?

[@jackle8964]

thanks a lot for your contribution :) i find it extremely useful !

[@suraj.chaudhary726]

Keep up the good work sir. Very useful...

[@MrBehruzEhmedov]

Hello. Many thanks for presentation. Just I got a qustion about the difference between future tax deductions and carring amount. Could you please make it clear for me?

[@nedeljkojovanovic7869]

Great explanation! Keep up the good work.

[@junge268]

you mentioned the reason for considering the cash collection from debtors as non-taxable future economic benefit is that tax authority will tax us when we invoiced those cash receivable and they will not tax us again when we received the cash. It really confused me, sorry, because i was taught that tax office applies cash bases, so, for receivables, they will tax the actual amount we received. Could you please give me some detail explanation? thanks a lot

[@TabaldiEducation]

Hi JUN GE. Please note that the presenter was referring to the South African tax regime which may be different to your jurisdiction. In South Africa, the tax authorities levy income tax at the earliest of receipt or accrual. This means when the company invoices the customer, they are liable to pay tax on the invoiced amount. In future when the debtor makes payment, that receipt of cash will not be taxed a second time. Therefore in South Africa, cash collections from debtors are non-taxable future economic benefits.

[@WCyoyoyo]

Would you please explain about the second example about why is it when the economic benefits are not taxable, the tax base is still 1000, but not NIL? Thank you

[@TabaldiEducation]

Hi Will. This is in accordance with the definition of Tax Base of an asset. If you go back to it around minute 1.24 of the video, you will note that "if the economic benefits will not be taxable then the tax base is equal to the carrying amount". As the debtor payment will not be taxable, the tax base is therefore equal to the carrying amount of 1000 as per the IAS 12 par 7.

[@WCyoyoyo]

Thank you sir. I got it now. I appreciate if you could answer to my other question in your other video. kzbin.info/www/bejne/nZvHi3WHlL6iibc

[@saurabh17]

Hi mate, This was very helpful. Thank you very much. Best regards from NZ.

[@njr1269]

Sir, Whey Tax base of Interest Receivable is Nil ?

[@TabaldiEducation]

Hi. I don't think we covered Interest Receivable in this video. Generally, the tax base of a receivable will equal the carrying amount. Per IAS12.7, if the economic benefits of an asset are not taxable in the future (e.g. cash in the bank or trade receivables, because it has already been taxed), then the tax base is equal to the carrying amount. That's why there is no temporary difference.

[@MrAlifadam]

I don't understand the future tax deduction term. Anything that is recovered from asset is an income. I thought income is taxable , why tax deduction?

[@TabaldiEducation]

Hi Adam.. the cost of the asset will be claimed as a deduction over time by means of wear and tear deductions (capital allowances). The tax base is the deductions that can be claimed in the future. The income we earn from the asset is totally separate from the tax base of the asset .

[@MrAlifadam]

@@TabaldiEducation another example besides capital allowance? I understand about the capital allowance. What about receivable? Whats to deduct?

[@TabaldiEducation]

@@MrAlifadam The tax base of trade receivables is equal to the carrying amount because the future economic benefits are not taxable (revenue has already been taxed).

[@MrAlifadam]

@@TabaldiEducation thank you!

[@seanmusona9408]

What if yhe wear and tear allowance is 0%

[@TabaldiEducation]

Hi Sean, regardless of the wear and tear allowance, the principle will stay the same. Do you have an example where the W%T is zero?

[@seanmusona9408]

@@TabaldiEducation hi, yes they said a new admin building was purchased for R2 000 000 , depreciated at 2% p.a . Residual value = R150 000 , and by wear and tear allowance = 0% , we were suppsed to find the carrying amount and the tax base so the 0% confused me

[@TabaldiEducation]

@@seanmusona9408 Ah, I see. In that case, the tax base will be equal to the purchase price.

[@seanmusona9408]

@@TabaldiEducation ok, thank you for your response

[@haiderrazakhalid3317]

If the tax base of debtors is more than its carrying value, what will be deferred tax consequences? and why?

[@TabaldiEducation]

Hi Haider, What would be the reason for this? One I can think of is because of the provision for bad debts applied by the company is different from the provision for bad debts allowed by the tax authority in which case a higher carrying value of a provision would result in a deferred tax asset.

[@maandabudeli1547]

Thanks a lot it really helped

[@TabaldiEducation]

Thank you for your comment Maanda Budeli We wish you well with your studies. For more comprehensive support and products view our site at www.tabaldi.org

[@fredmukuka7805]

Very Helpful thank you

[@nathandavis6681]

thank you!

[@aneh_06]

This saved me!!

[@nigelhove1791]

Anelisiwe Mdingi I hope it will do the same for me 😫😫😫😫. I have an exam next week and I'm so nervous

[@10010011001100110101]

I dont get it, I thought only people could be taxed, not assets

[@muhammadwaqar2558]

thanks a lot sir God bless u

[@TabaldiEducation]

Thank you Muhammad Waqar - pleased you enjoyed. The Tabaldi Team

[@jiayi6952]

Thank you so much, this short explanation video is useful for me! I have some questions about this tax base of asset. For the debtor (receivable) -100, how about if the debtor unable to pay the remaining 200. So, TB, TD and DT will be dif?

[@phillipmokhene1156]

I really found this video useful. Thanks so much!!! Tax is not that difficult after all.

[@arunnz]

Thanks

[@hrmn8396]

bhai tax base kya hota hai

[@snowysadventures3698]

what does he mean by tax deductible? any thoughts guys?

[@TabaldiEducation]

Hi Amjad, what we mean by tax deductible is that an amount will be deductible for your taxable income (tax profit) calculation, that is to say that an "expense" will be deductible when calculating your tax expense.

[@snowysadventures3698]

that's great! thanks for the video - it was extremely useful!