DipIFR Syllabus C. Presentation and additional disclosures - IAS 1 Presentation of Financial Statements - Past Papers ^{1 / 6}

Non-current assets are often a highly significant component of the total assets of an entity. Therefore, a number of different International Financial Reporting Standards have been published which regulate their definition, recognition, measurement and disclosure. IAS 1 Presentation of Financial Statements distinguishes between current and non-current assets. IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets specifically regulate the recognition, measurement and disclosure of tangible and intangible assets respectively.

Required:
Explain how:
(i) IAS 1 distinguishes between current and non-current assets. (3 marks)

A deferred tax liability is the amount of income tax payable in respect of taxable temporary differences. A deferred tax asset is the amount of income tax recoverable in future periods in respect of deductible temporary differences.

A temporary difference is the difference between the carrying amount of an asset or liability in the statement of financial position and its tax base.

Required:
(i) Define the tax base of an asset as outlined in IAS 12 – Income Taxes. Use your definition to compute the tax base of the following assets:

– A current asset of $60,000 relates to interest receivable. The related interest revenue will be taxed on a cash basis when it is received. (4 marks)