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CA Final Ind AS 12 Income Taxes — practice questions — page 2

Explore 89 free Ind AS 12 Income Taxes questions in CA Final Financialreporting. Open each question or exercise to read its content, reference answers and available explanation.

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Ind AS 12 Income Taxes questions and exercises with answers

Showing questions 31–60 of 89.

A deferred tax asset is recognised for deductible temporary differences to the extent it is:Read the answer and worked solution →A provision of Rs. 100 for gratuity is deductible only when paid. At a 25% rate, the deferred tax asset is:Read the answer and worked solution →Probable profit exists if taxable differences reverse in the:Read the answer and worked solution →When judging future taxable profit, an entity ignores taxable amounts from deductible differences that will:Read the answer and worked solution →Tax planning opportunities are actions an entity would take to:Read the answer and worked solution →Which is an example of a tax planning opportunity?Read the answer and worked solution →If goodwill's carrying amount is below its tax base, the difference gives a:Read the answer and worked solution →A deferred tax asset for unused tax losses is recognised to the extent that it is probable that:Read the answer and worked solution →A history of recent losses is described in Ind AS 12 as:Read the answer and worked solution →Which factor favours recognising an asset on unused tax losses?Read the answer and worked solution →Unrecognised deferred tax assets are reassessed:Read the answer and worked solution →Subsidiary's undistributed profits cause a difference on the parent's:Read the answer and worked solution →No liability arises if the parent controls timing and reversal is:Read the answer and worked solution →Why can a parent avoid a liability on subsidiary undistributed profits?Read the answer and worked solution →An investor usually books a liability on an associate because it:Read the answer and worked solution →Such an asset on subsidiary differences needs the difference to:Read the answer and worked solution →Current tax liabilities and assets are measured at tax rates that are:Read the answer and worked solution →Deferred tax is measured at the rates expected to apply when the:Read the answer and worked solution →If a rate announcement has the substantive effect of enactment, use:Read the answer and worked solution →When different rates apply to different income levels, deferred tax uses the:Read the answer and worked solution →Deferred tax measurement reflects the expected manner of:Read the answer and worked solution →An item has carrying amount Rs. 100 and tax base Rs. 60. Sale is taxed at 20%. Deferred tax liability if it will be sold:Read the answer and worked solution →The same item (carrying Rs. 100, base Rs. 60) will be used, and other income is taxed at 30%. The liability is:Read the answer and worked solution →For the revalued item (carrying Rs. 150, base Rs. 70, rate 30%), the liability on recovery through use is:Read the answer and worked solution →If that revalued item is sold at Rs. 150 and only the Rs. 30 tax depreciation is taxable at 30%, the liability is:Read the answer and worked solution →For a non-depreciable revalued asset, deferred tax reflects the consequences of recovery through:Read the answer and worked solution →If a higher or lower tax rate applies to distributed profits, current and deferred tax use the rate on:Read the answer and worked solution →Under Ind AS 12, deferred tax assets and liabilities are:Read the answer and worked solution →Why does Ind AS 12 prohibit discounting of deferred tax balances?Read the answer and worked solution →The carrying amount of a deferred tax asset must be reviewed:Read the answer and worked solution →

Worked practice questions

A deferred tax asset is recognised for deductible temporary differences to the extent it is:

  1. Possible in some year
  2. Certain to be refunded
  3. Approved by tax officer
  4. Probable profit will exist
Show answer and solution

Correct answer: D. Probable profit will exist

The asset is only recognised when it is probable that taxable profit will be available to use the deduction.

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A provision of Rs. 100 for gratuity is deductible only when paid. At a 25% rate, the deferred tax asset is:

  1. Rs. 100
  2. Rs. 75
  3. Rs. 25
  4. Rs. 125
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Correct answer: C. Rs. 25

Tax base of the liability is nil, so the deductible difference is Rs. 100, and 25% of 100 gives a deferred tax asset of Rs. 25.

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Probable profit exists if taxable differences reverse in the:

  1. Next decade, same entity
  2. Prior year, other authority
  3. Same period, same authority
  4. Any year, any authority
Show answer and solution

Correct answer: C. Same period, same authority

Sufficient taxable differences of the same taxable entity and authority reversing in the same period support recognising the asset.

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More Financialreporting topics

Ind AS 116 LeasesInd AS 36 Impairment of Assets and Ind AS 38 Intangible AssetsInd AS 24 Related Party Disclosures and Ind AS 108 Operating SegmentsInd AS 1 Presentation of Financial StatementsInd AS 113 Fair Value MeasurementInd AS 109 Financial InstrumentsInd AS 23 Borrowing Costs and Ind AS 40 Investment PropertyInd AS 103 Business Combinations