Which one of the followings is the defined tax base of the liability?I Carrying amount - future deductible amountII Carrying amount - future taxable amountIII Carrying amount – revenue received in advance not taxable in futureIV Carrying amount – revenue received in advance taxable in future Reading required: Learning objective 13.5.2 on pages 422-423Group of answer choicesI, IVII, IVII, III
Question
Which one of the followings is the defined tax base of the liability?I Carrying amount - future deductible amountII Carrying amount - future taxable amountIII Carrying amount – revenue received in advance not taxable in futureIV Carrying amount – revenue received in advance taxable in future Reading required: Learning objective 13.5.2 on pages 422-423Group of answer choicesI, IVII, IVII, III
Solution
The tax base of a liability is the amount at which it is measured for tax purposes. It is determined based on the rules established by the tax law of the jurisdiction where the liability arises.
Here are the definitions of each option:
I. Carrying amount - future deductible amount: This is not the tax base of a liability. The tax base is not determined by subtracting future deductible amounts from the carrying amount.
II. Carrying amount - future taxable amount: This could be considered the tax base of a liability, as it represents the amount that will be taxable in the future.
III. Carrying amount – revenue received in advance not taxable in future: This is not the tax base of a liability. Revenue received in advance that is not taxable in the future does not affect the tax base.
IV. Carrying amount – revenue received in advance taxable in future: This could be considered the tax base of a liability, as it represents the amount that will be taxable in the future.
So, the correct answer would be II, IV.
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