Under IFRS When a Change in the Tax Rates Is

question 27

Multiple Choice

Under IFRS when a change in the tax rates is enacted
I.Companies should record its effect on existing deferred tax accounts immediately.
II.Companies report the effect of changes in tax rates on deferred tax accounts in the period the new rate becomes effective.
III.Companies report the effect of changes in tax rates on deferred tax accounts that arise in future periods when the new tax rates are in effect.

• A)I Only.
• B)II Only.
• C)III Only.
• D)Either I, II, or III, depending on how frequently tax rates change in the company's tax jurisdiction.

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Definitions:

Gestalt Principles

A theory in psychology that proposes the human brain sees objects in their entirety before perceiving their individual parts, suggesting the whole is greater than the sum of its parts.

Relative Luminance

Is the brightness of an object in comparison to the brightness of a similarly illuminated white object, crucial in defining contrast in visual perception.

Perceptual Set

A mental predisposition or readiness to perceive something in a particular way, influenced by expectations and prior beliefs.

Interposition

A visual cue for depth perception where one object partially blocks the view of another, indicating the former is closer to the observer.