Link with IAS 12: deferred tax on awards

Learning objectives

• Calculate the deferred tax asset on an award and the portion of the tax benefit recognised in equity.L3, L4

Normative references

The syntheses of the reference register are written in French: only the paragraph reference is shown here.

2 questions

• Nordis SA has granted employee options whose exercise will give rise to a future tax deduction. At the closing date, the intrinsic value of all the options is {intrinsic_value_total} and the vested share is {vested_share}; the expected tax deduction is computed on the intrinsic value multiplied by the vested share (case convention). The cumulative expense recognised is {cumulative_expense} and the tax rate is {tax_rate} (case data). Compute the deferred tax asset and the part of the tax effect taken directly to equity.L4
• At the closing date, the expected future tax deduction on an option plan is 450,000, while the cumulative expense recognised is 360,000. A colleague takes the tax effect of the whole expected deduction to profit or loss. What is the error?L3