Consider Each of the Following Separate Situations

question 26

Essay

Consider each of the following separate situations.State whether each gives rise to a deferred tax asset (DTA)or a deferred tax liability (DTL).Give reasons for your answer and also indicate why and when any DTA or DTL will be reversed in the accounting records.
(i)Depreciation for accounting purposes exceeds depreciation allowed for income tax purposes
(ii) A provision for doubtful debts has been made for the first time
(iii) Goodwill is beingamortisedeach year
(iv) A loss has been incurred, for both accountingand taxation purposes, but the company expects to earn profits in each of the next two years

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Definitions:

Statistical Significance

A mathematical indication that the difference observed between groups or the relationship within data is unlikely to have occurred due to chance alone, typically determined by a p-value.

Sample Size

The number of subjects or units included in a study or analysis.

Independent-Means T Test

An analytical technique employed to assess if the averages of two distinct groups differ significantly in a statistical context.

Elements

The basic constituents of a data set, or the simplest units of which a substance or system is composed.