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IAS 12Workpapers (Step 4 of 5)

Workpaper assignment

Step 4 of 5

IAS 12 Income Taxes — wording before IFRS 18Applicable today

Applies to annual periods beginning before January 1, 2027.

Mission · workpaperWorkpaper · IAS 12L2 · Intermediate

Documents

Fixed asset register

Schedule

Fixed asset register

Extract from the fixed asset register at 31 December 20X3. Machine A (acquired on 1 January 20X1, cost 900,000): IFRS carrying amount 630,000; the tax law allows accelerated depreciation, cumulative deductions 20X1 to 20X3: 650,000. Machine B (acquired several years ago, tax cost 400,000): IFRS carrying amount 150,000; cumulative tax deductions: 330,000. Development costs of a new gear reducer, capitalised in 20X3 (criteria of the standard on intangible assets met according to management; amortisation from the start of production on 1 January 20X4): 300,000; the tax law deducted them in full in 20X3, i.e. 300,000.

Temporary differences schedule: Warranty provision

Tax base schedule of an industrial SME: accelerated depreciation, development, provisions and revenue received in advance

5 documents9 sections to document
0 / 6 sections completed
Guided mode

Section 1 of 9

Objective

In progress
Section brief
What to document
The engagement, its scope and the working mode chosen.
Why
A workpaper answers one precise question: framing it avoids off-topic work.
How
Read the objective and the assignment, then choose the mode (guided, semi-guided, professional).
Expected result
You know which question the workpaper must settle, and for which reporting date.
Your role
Preparer of the IAS 12 workpaper
Level
Intermediate
Estimated time
≈ 40 min
Progress
0 / 5 steps done (review excluded)

Context

Kerlidou Mécanique SAS (a fictitious entity) manufactures transmission parts. It prepares IFRS financial statements and is subject to a single taxation authority. You are preparing deferred tax for the year ended 31 December 20X3, from the IFRS statement of financial position, the tax file and the deferred tax schedule of the previous year.

Assignment

Temporary differences schedule workpaper (one item per instance).

Purpose of the workpaper

For one statement of financial position item (asset or liability) of a taxable entity, determine the tax base and the taxable or deductible temporary difference, review the exceptions (goodwill, initial recognition, single transaction giving rise to equal differences), compute the gross deferred tax at the rate expected on reversal, then post the entries and pass the items on to the note.

Questions of the file covered by this workpaper

  • Calculate the tax base of the assets (machines, development, research, receivables).
  • Calculate the tax base of the liabilities (warranties, revenue received in advance, fine).
  • Calculate the temporary differences and state their direction (taxable or deductible).
  • Calculate the deferred tax liabilities and assets at 31 December 20X3.

Documents in the file

Open the documents to pick out the relevant information.

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