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    Question

    Company had opening deferred tax liability (DTL)

    ₹50,000. Due to tax rate change enacted after reporting date, DTL must be remeasured to ₹45,000. The remeasurement effect is generally recognised in:
    A Profit or loss or OCI depending on origin of DTL --- if related to items in OCI, recognise in OCI; otherwise, P&L Correct Answer Incorrect Answer
    B Directly to equity only Correct Answer Incorrect Answer
    C As a non-cash disclosure only Correct Answer Incorrect Answer
    D As extraordinary item Correct Answer Incorrect Answer

    Solution

    The effect of a change in tax rates on deferred tax is recognized in profit or loss, except to the extent it relates to items previously recognized outside profit or loss (in OCI or equity).

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