Ostrelle issues convertible bonds for 2,000,000; the liability component is measured at 1,850,000, the balance being classified in equity. In its jurisdiction (case data), the tax base of the liability component equals the total issue proceeds. Tax rate: 25%. Compute the difference and the deferred tax liability at issue.
- Issue proceeds
- 2,000,000
- Liability component
- 1,850,000
- Tax rate (%)
- 25 %