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In: AccountingOrca Ltd applies the principles of tax-effect accountingas per AASB 112/IAS 12 in accounting for...Orca Ltd applies the principles of tax-effect accountingas per AASB 112/IAS 12 in accounting for company income tax. OrcaLtd calculates depreciation expense on its plant using thestraight-line method, but applies an accelerated method for taxpurposes. Tax depreciation in the current year is then larger thanthe related accounting expense..Orca Ltd has also recognised rent received in advancefrom buildings that it owns. These revenues are included in thecurrent year’s taxable profit but shown in the financial statementsas a liability.Required:Determine how Orca Ltd should account for the abovedifferences for accounting and tax.Analyse under what circumstances Orca Ltd should raisedeferred tax accounts and how they should be classified in thestatement of financial position.