Sales

Dividend
Expenses
Depreciation
Max CCA
Statutory tax rate
Taxable Income
Tax Current
Deferred Tax
Total
Tax deferred
Net Income
Effective Tax Rate
Future Income Taxes on BS

Taxable Income
Current Yr Last Year
827000
739000
0
0
562000
504000
0
0
180000
173000
30%
34%
85000
25500
25500

62000
21080
43000
64080

IBIT
Tax demand
Deferred tax demand
Net Income

We have claimed more CCA than depreciation which lowere

temp diff=accounting value of asset-tax value of asset
Temp Difference
Temp diff given
Deferred tax liability
Future tax rate expected
In current year tax changed to 34%
CCA/Dep
defred tax expense
End of prior year

Last Year
Carry Forward temp diff
Last year temp diff
Total temp diff
Tax@34%

Example 1
Asset value
Depre/CCA

Example 2
Income before depreciation

We buy asset of 100000 with life of 2 years

|Depreciation
IBIT
Tax expense current
Deferred tax expense
Income
Now Govt allows to write all against CCA so
CCA
Taxable income

Accounting Income
827000
25000
562000
141000
0
0%

739000
23000
504000
132000
0
0%

149000
25500
5644
31144
117856

126000
21080
8476
29556
96444

CCA than depreciation which lowered our taxable income so in future our future tax liability is increased
alue of asset-tax value of asset

110400
43000
38.95%

Given

8476
51476
5644
57120

!=173000-132000
temp diff
110400
41000
151400
39000
190400

nged to 34%
Defred tax

-41000

34%
30%
This Year
Temp Diff
Tax

110400
41000
151400
51476 This liability was carried forward

Accounting

Tax
1000000
132000
868000

Year 1

Accounting
Year 2
100000

151400 temp diff

889600
173000
716600

100000

37536
23596

64000
19200
45420
64620

-41000
-13940

0 with life of 2 years

50000
50000
0
15000
35000

50000
50000
30000
15000
35000

100000
0

0
100000

ite all against CCA so

Sales
Dividend
Expenses
Depreciation
Max CCA
Statutory tax rate
Taxable Income
Tax Current
Deferred Tax
Total

Taxable Income
Current Yr
Last Year
827000
0
562000
0
180000
30%
85000
25500

739000
0
504000
0
173000
34%

Sales
Dividend
Expenses
Depreciation
Max CCA
Statutory tax rate

62000
21080
43000
64080

25500

Taxable Income
Tax Current
Deferred Tax
Total
Temp Diff

Accounting
Tax

132000
173000
-41000
34%
-13940

13940

Accounting Income
Current Yr
Last Year
827000
25000
562000
141000
180000
30%

739000
23000
504000
132000
173000
34%

149000
25500

126000
21080

25500

64080

Tax Liability last yr

Deferred tax

0
13940
43000
29060
9880

126000
21080
8476
29556
96444

35380
Temp Diff

64000

Deferred Tax

21760
43000

37536

15776