Unpaid taxes actually assessed are included in other liabilities
Unpaid taxes actually assessed are included in other liabilities. Income taxes
currently payable but not yet assessed are shown as a separate item under the
Deferred taxes are calculated using the liability method. The calculation is to be
based on all timing (temporary) differences between the carrying value in the
financial statements and the tax base without regard to the expected period of
reversal. The effect of tax losses expected to be offset against income during the
next five years is also to be included. The rate to be taken is that anticipated by
the company for the year of reversal.
If not known, the latest known rate should
be assumed. If the net deferred tax balance is a liability, it should be shown as
the last item on the liabilities side of the balance sheet. If it is an asset, it may be
capitalised and disclosed as the final asset item.