Understanding Tax in Company Accounts

Overview

Accounting for taxation in company accounts, especially deferred taxation, has for a long time been a problem area for many accountants. This course aims to steer a clear path through the tax accounting rules and disclosure requirements of FRS 102 and IAS 12, and to provide a clear and logical approach to preparing the relevant amounts for recognition and disclosure in respect of current and deferred taxation.

Who is this for?

The course is primarily designed for anyone involved in the preparation of the elements of statutory financial statements relating to taxation in compliance with FRS 102 or IFRS Standards.

What will you learn?

This course gives a clear and logical approach to the accounting for current and deferred taxation, illustrated by a spreadsheet based case study example.

Specific areas to be considered include:

• The required disclosures and their usefulness to readers, illustrated by extracts from published financial statements
  • The income statement (statement of profit or loss)
  • The balance sheet (statement of financial position)
  • The statement of comprehensive income
  • Notes to the financial statements
• The opening position
  • Adjustments due to post publication finalisation of tax liabilities
  • Adjustments for error correction and changes in accounting policy
• Deferred taxation
  • The FRS 102 concept: timing differences
  • The IAS 12 concept: temporary differences
  • Areas of consistency
  • Areas where differences arise
  • The 7 step approach to deferred tax
    • Establishing TDs
    • Determining the relevant tax rate
    • Computing deferred tax balances
    • Assessing recoverability of asset balances
    • Computation of performance statement amounts
    • Allocation between “profit or loss” and “other comprehensive income”
• Current taxation
  • The tax account
  • Amounts in profit or loss and other comprehensive income
  • Year end balances
• The proof of tax and the tax reconciliation
  • Disclosure requirements
  • Amounts to include and exclude
  • Consequences of imbalances
  • Sense checking
• Further tax accounting issues
  • Deferred tax issues
    • Revaluations
    • Share based payments
    • Pensions
    • Business combinations
  • R&D tax credits

Other related courses

FRS 102 - A Comprehensive Refresher Programme

Group Accounting - Fundamentals

Group Accounting - Advanced

Pension Costs in Company Accounts