Sivrance carries a deferred tax liability computed at 30% on a taxable temporary difference of 300,000, arising from accelerated tax depreciation recognised in profit or loss. In November 20X5, an enacted law sets the rate applicable on reversal at 25%. The difference is unchanged at 31 December 20X5. Compute the liability at the reporting date and the deferred tax income from the rate change.
- Taxable temporary difference
- 300,000
- Previous rate (%)
- 30 %
- Rate enacted for the reversal (%)
- 25 %