Chovore's new policy leads to recognising, at 1 January 2024 (opening of the earliest period presented), a liability of 20,000 that was not recognised under the old policy. The expense will be deductible when paid, at a rate of 25 %, and the deferred tax asset is recoverable (case data). Record the opening entries.
- Additional liability at opening
- 20,000
- Tax rate
- 25 %