Under IAS 12, Income Taxes, How Is the Relationship Between

question 41

Multiple Choice

Under IAS 12, Income Taxes, how is the relationship between a hypothetical tax expense based on statutory rates and reported tax expense based on the effective tax rate explained?

• A) A numerical reconciliation between tax expense based on the statutory rate in the home country and tax expense based on the effective tax rate must be presented.
• B) A numerical reconciliation between tax expense based on the weighted-average statutory rate across jurisdictions in which the company pays income taxes and tax expense based on the effective tax rate must be presented.
• C) Both (A) and (B) can be acceptable explanations.
• D) Neither (A) nor (B) are acceptable explanations.

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A psychological framework used to understand and interpret the world, unique to each individual.

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