Tax expense in profit or loss

Learning objectives

• Identify where the tax expense related to profit or loss is presented.L1, L2

Normative references

• IAS 12 §77The tax expense (tax income) related to profit or loss from ordinary activities is presented as part of profit or loss in the statement(s) of profit or loss and other comprehensive income.
• IAS 12 §78IAS 21 requires certain exchange differences to be recognised as income or expense but does not specify where they should be presented; exchange differences on foreign deferred tax liabilities or assets recognised in profit or loss may therefore be classified as deferred tax expense (income) if that presentation is considered to be the most useful to users of financial statements.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

9 questions

• The tax expense (income) related to profit or loss from ordinary activities is presented in profit or loss, in the statement(s) of profit or loss and other comprehensive income.L1
• Arquevin takes the current tax on its operating profit directly to equity, so as not to reduce reported profit.L1
• Exchange differences on a foreign deferred tax liability recognised in profit or loss may be classified as deferred tax expense (income) if that presentation is considered the most useful to users.L2
• IAS 21 specifies that exchange differences on foreign deferred tax assets and liabilities must always be presented within finance income and expenses.L2
• The tax expense presented in profit or loss is the aggregate amount included in profit or loss in respect of current tax and deferred tax.L1
• Where does Belcastor present the tax expense related to profit or loss from its ordinary activities?L1
• Calvidra recognised a revaluation of land in other comprehensive income; the related deferred tax amounts to 45,000. How is this tax presented?L2
• Dorvenne's 20X5 data: current tax 500,000; deferred tax expense in profit or loss 80,000; deferred tax on a revaluation recognised in other comprehensive income 40,000. What tax expense does Dorvenne present in profit or loss?L2
• The Estriva group holds a foreign subsidiary whose deferred tax liability, translated under IAS 21, gives rise to an exchange loss of 12,000 recognised in profit or loss. How may Estriva classify this loss?L2