Accounting · IAS 12 Income Taxes
In December 20X5, Mighty IT Co revalued its corporate headquarters, raising its carrying amount from $2.0m to $2.5m (gain recognised in OCI). On the same date, it revalued a sales office, reducing its carrying amount from $500,000 to $400,000 due to defects (impairment loss recognised in profit or loss). The impairment loss is tax-deductible. If the income tax rate is 30%, what is the impact of these revaluations on the income tax expense in profit or loss for the year ended 31 December 20X5 in accordance with IAS 12?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1No impact on income tax expense
- 2Income tax expense decreases by $30,000✓
- 3Income tax expense increases by $120,000
- 4Income tax expense increases by $150,000
Correct answer
Income tax expense decreases by $30,000
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Accounting?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice IAS 12 Income Taxes MCQs →Want more practice questions on IAS 12 Income Taxes?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Accounting · IAS 12 Income Taxes