Pellonde has deductible temporary differences (provisions deductible when paid, recognised in profit or loss) of 200,000 at the start of the year, for which a deferred tax asset is recognised at 24%. A law enacted in 20X5 raises the rate applicable on reversal to 27%. At the reporting date, the differences amount to 260,000; the asset remains fully recoverable. Compute the asset at the reporting date and the part of its change due to the rate change alone, measured on the opening differences (breakdown convention of the case).
- Deductible differences at the start of the year
- 200,000
- Deductible differences at the reporting date
- 260,000
- Previous rate (%)
- 24 %
- Rate enacted for the reversal (%)
- 27 %