Accounting for deferred tax
You'll learn how to calculate and account for deferred tax, a key concept in Financial Reporting and Strategic Business Reporting papers.
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In this lesson
- 0:00 Deferred tax: concept and calculation
- 3:15 Worked example: depreciation and capital allowances
- 8:47 Statement extracts: profit and tax expense
- 9:06 Statement of financial position: deferred tax liability
- 10:16 Revaluation of non-current assets
- 12:57 Worked example: revaluation surplus accounting
- 15:59 Other scenarios: development costs and impairments
- 17:43 Tax losses and deferred tax assets
- 19:35 Summary: deferred tax in financial statements
About this lesson
This video walks you through the core principle: deferred tax arises when there's a temporary difference between how you depreciate an asset in your financial statements and the tax allowances the authorities permit. You'll see how to calculate the deferred tax provision, record it correctly in your accounts, and handle special cases like revaluation of assets and tax losses. The detailed worked examples show exactly how timing differences reverse over time and where deferred tax appears in both your statement of profit and loss and statement of financial position.
Duration: 20m
Transcript
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