Carmaux's machine is reaching the end of its tax depreciation: accounting depreciation now exceeds tax depreciation and the taxable difference is decreasing. The deferred tax liability was 18,000 at the start of the year; the temporary difference is only 42,000 at the reporting date, at the expected rate of 25%. Record the change.
- Opening deferred tax liability
- 18,000
- Closing taxable temporary difference
- 42,000
- Expected rate (%)
- 25 %