Tax Effect Accounting

10 Pages 2621 Words

sets or liabilities - Tax bases of assets or liabilities = Assessable or deductible temporary differences

Assessable or deductible temporary differences x Tax rates = Deferred tax liabilities or assets.


This essay will look into the new tax-effect accounting and then identify the significant differences between the conceptual basis of tax-effect accounting adopted in the revised and superseded Standards. This essay will also look at some basic measures that organizations can take to confront this new change.






















The New Tax Effect Accounting

The revised AAS 3 / AASB 1020 “Income Taxes” replaces the superseded Standard AAS 3 / AASB 1020 “Accounting for Income Taxes”. The revised Standard was compulsory for half-year ending on or after 31 December 2002 and full-years ending on or after 30 June 2003 but has been deferred. It has been deferred to 30 June 2003.

The revised Standard requires the use of a comprehensive balance sheet liability method of tax effect accounting.

This re...