As 22 & AS 28

pratik upadhyay (AUDIT COMPLIANCE OFFICER)   (469 Points)

18 March 2012  

 

while solving this i stucked...

Carrying amount = 40,00,000
WDV = 32,00,000
recoverable amount = 26,00,000

tax rate: 40 %

find out the impairment lossand the defferd tax effect thereof ,given that impairment losses not allowed for TAX purposes..

IN SOLUTION:

Carrying amt - Recoverable amount = I.Loss. 14,00,000

THIS 14,00,000 IS CONSIDERED AS TIMING DIFFERENCE...AS PER AS-22 ...IS THIS COORECT !!!

FROM THIS 14,00,000 deducted 8,00,000 ( difference due dep.accounting 40 lac - 32 lac)

therfore net timing difference 6,00,000
& finally DTA = 2,40,000.

why impairment loss has been considered as TIMING DIFFERENCE..??