Elvarine has deductible differences of 400,000, which will reverse between 20X6 and 20X8; it has no taxable differences. Its tax budgets (case assumptions) forecast for these three years cumulative taxable profit of 150,000, computed after deducting these reversals. Tax rate: 25%. Compute the taxable profit to be compared with the differences and the deferred tax asset.
- Deductible differences reversing in 20X6-20X8
- 400,000
- Forecast taxable profit, after the reversal deductions
- 150,000
- Tax rate (%)
- 25 %