At 31 December 20X5, the deferred tax asset of Dorvenne's share option plan was 60,000, recognised entirely in profit or loss (no excess at that date). At 31 December 20X6, the rise in the share price brings the estimated future deduction to 900,000, against a cumulative remuneration expense of 700,000. Rate: 25%; recoverable asset. Teaching assumption: the split is determined on cumulative amounts at the reporting date. Record the 20X6 entry.
- Deferred tax asset at 31 December 20X5
- 60,000
- Estimated future deduction at 31 December 20X6
- 900,000
- Cumulative remuneration expense
- 700,000
- Tax rate (%)
- 25 %