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The concept of deferred taxation has traditionally been one of the most difficult accounting areas to comprehend and to apply. This is mainly because it serves to bridge the gap between taxation and accounting principles. Without it, the tax expense of a business entity would not be fully accounted for, and would therefore lead to distortions in the reporting of the profit after tax.
The workshop comprises explanations, illustrations, worked examples and a detailed coverage of the complete disclosure requirements using the financial statements of selected companies.
Participants are required to bring their own calculators as they will be required to perform case studies.
KEY TOPICS COVERED
Part 1: Basic and intermediate level
• Principles of deferred taxation
• Purpose and need to account for deferred taxation
• Understanding tax bases and temporary differences
• The tax base for assets, liabilities and equity form one of the elements of the computation of the provision for deferred taxation
• The other element is the carrying amount
• The difference between the two elements would give rise to either a taxable or deductible temporary difference
• Basis of provision under the Balance Sheet Liability Method
• Very important to distinguish between the previous method using the Income Statement Approach vs the new method using the Balance Sheet Approach
• Understanding temporary differences and differences arising from initial recognition
• Types of temporary differences :
• Capital allowances vs depreciation
• Treatment of provisions and accruals
• Treatment of hire purchase transactions and finance leases
• Differences from initial recognition (previously “permanent differences)
• Non deductible expenses
• Non taxable income
• Criteria for the recognition of deferred tax assets
• Unused tax losses and tax credits
• Accounting treatment for the recognition as deferred tax assets
• Two case studies to enhance understanding and practical application of the above principles
• Basic presentation and disclosure requirements of current and deferred taxes
Part 2: Advanced level
• Recognition of deferred tax assets
• Deferred tax implications of:
- fair valuation/revaluation of assets
- fair valuation due to business combinations
- compound financial instruments
• Different scenarios of tax reconciliations
• Advanced presentation and disclosure requirements of current and deferred taxes, with emphasis on the tax reconciliation disclosure requirement
• One case study to enhance understanding and practical application of the above principles (as a follow up to Day 1)
This workshop is designed to provide participants with a comprehensive understanding of the complexities of MASB 25 / MFRS 112 /FRS 112 Income Taxes that relate to the recognition, measurement, presentation and disclosure of deferred taxation.
Ms Lim Geok Heng
Geok Heng is a Fellow member of the Association of Chartered Certified Accountants and a Chartered Accountant of the Malaysian Institute of Accountants. She is also a Certified Professional Trainer (CPT, IPMA, UK).
She has over 32 years experience in areas comprising auditing, financial accounting, treasury functions, education and training. Her most recent past appointments include the positions of Chief Technical and Training Officer of a medium-sized accounting firm, Training Manager of Ernst & Young, Lecturer in Sunway University College and Senior Lecturer in Tunku Abdul Rahman College.
She speaks on MASB Reporting Standards and accounting and audit issues regularly throughout Malaysia for CPA Australia, ACCA, CIMA, MAICSA, MIA and MICPA.
Accountants, finance managers, financial controllers, auditors, CFOs, Finance directors and anyone who wanted to know about MFRS updates.