CERTYNEX IFRS ACADEMY

Morlance recognised an IAS 16 revaluation of 300,000 in OCI and, for deferred tax (rate 25%): deferred tax expense in profit or loss 75,000 / deferred tax liability 75,000. Where is the error?

The amount: the tax should have been computed on the total revalued amount.

The arithmetic: 300,000 × 25% gives 60,000.

The principle: a revaluation creates no deferred tax until the asset is sold.

The other side: the tax had to be recognised in OCI, not in profit or loss.