IAS 34Chapter 5Lesson 1
Tax in the interim report: the estimated annual effective rate
Step 1 of 9Learning objectives
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The tax expense of each interim period is obtained by applying to pre-tax income the best estimate of the expected weighted average annual effective rate; the period is deduced from the cumulative figure.
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Learning objectives
- Explain that interim tax rests on the best estimate of the expected weighted average annual effective rate.
- Calculate the cumulative tax expense at the estimated rate and deduce the period's expense.
- Record the period's tax expense (income tax expense / income tax payable).
- Rule out the nominal statutory rate and the equal allocation of annual tax.