Tham khảo tài liệu 'the solutions manual for advanced financial accounting_9', tài chính - ngân hàng, kế toán - kiểm toán phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | 356 Part 2 Financial reporting in practice Questions Authors note. This question has been included for students who wish to consider the partial provision method of accounting for deferred tax which was required by SSAP 15 but is now outlawed by FRS 19. The Accounting Standards Board ASB currently faces a dilemma. IAS 12 revised Income Taxes published by the International Accounting Standards Committee IASC recommends measures which significantly differ from current UK practice set out in SSAP 15 Accounting for Deferred Tax. IAS 12 requires an enterprise to provide for deferred tax in full for all deferred tax liabilities with only limited exceptions whereas SSAP 15 utilises the partial provision approach. The dilemma facing the ASB is whether to adopt the principles of IAS 12 revised and face criticism from many UK companies who agree with the partial provision approach. The discussion paper Accounting for Tax appears to indicate that the ASB wish to eliminate the partial provision method. The different approaches are particularly significant when acquiring subsidiaries because of the fair value adjustments and also when dealing with revaluations of fixed assets as the IAS requires companies to provide for deferred tax on these amounts. Required a Explain the main reasons why SSAP 15 has been criticised. 8 marks b Discuss the arguments in favour of and against providing for deferred tax on i fair value adjustments on the acquisition of a subsidiary ii revaluations of fixed assets. 7 marks c XL plc has the following net assets at 30 November 1997. Fixed assets 000 Tax value 000 Buildings 33 500 7500 Plant and equipment 52 000 13 000 Investments 66000 66 000 151500 86 500 Current assets 15 000 15 000 Creditors. Amounts falling due within one year Creditors 13 500 13 500 Liability for health care benefits 300 13 800 Net current assets 1 200 Provision for deferred tax 9 010 9 010 143690 78 990 XL plc has acquired 100 of the shares of BZ Ltd on 30 November 1997. .
