Which of the Following Statements Is Correct with Respect to AASB

question 32

Multiple Choice

Which of the following statements is correct with respect to AASB 112 "Income Taxes" when the government increase tax rates?

• A) The entity applies a prospective application to deferred tax assets and deferred tax liabilities initially recognized subsequent to the announcement of the tax change.
• B) Expense is recognised if the entity has deferred tax liabilities only.
• C) Income is recognised if the entity has deferred tax liabilities only.
• D) Expense is recognised if the entity has deferred tax assets only.
• E) None of the given answers

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Definitions:

Warrants

Financial derivatives that give the holder the right, but not the obligation, to buy or sell a security at a predetermined price before or on a specified date.

Maturity Dates

Refers to the specific date on which the principal amount of a bond, loan, or other financial instrument is scheduled to be paid in full.

Options

Financial derivatives that give the holder the right, but not the obligation, to buy or sell an asset at a pre-determined price before or at a specific time.

ESOs

Employee Stock Options, which are a form of equity compensation granted by companies to their employees as part of their remuneration package.