Which of the Following Statements Is Correct with Respect to AASB

question 67

Multiple Choice

Which of the following statements is correct with respect to AASB 112 Income Taxes when a non-current asset is revalued?

• A) On revaluation date, the revaluation reserve is increased by the product of the temporary difference and the tax rate.
• B) On revaluation date, the revaluation reserve is decreased by the product of the temporary difference and the tax rate.
• C) On revaluation date, a deferred tax liability is created equal to the amount of the temporary difference.
• D) On revaluation date, a deferred tax asset is created equal to the amount of the temporary difference.

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Definitions:

Cash Balances

The amount of cash or cash equivalents that a company or individual holds at a given time.

Marketable Securities

Financial instruments that can be easily converted into cash at a fair market value.

Accounts Receivable

Accounts receivable represent money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Restrictive Policy

Restrictive Policy is a monetary policy approach aimed at slowing down economic growth to curb inflation, typically by raising interest rates or reducing the money supply.