Part 2 : deferred tax 0%, 14.5% or 29%?

Abstract

Recent circular issued by SAICA, Circular 1/2006, Disclosures in relation to deferred tax, recognizes that the debate surrounding paragraph 51 of IAS 12 (AC 102) has focused particularly on measuring deferred tax in relation to investment properties. The appropriate rate to be used to measure deferred tax is not an accounting policy choice. The rate should be determined based on the expected manner of recovery of the carrying amount of the asset. Secondly, the 14.5% rate is only appropriate, in the case of buildings, if it is expected that the carrying amount of the asset will be recovered through sale, and then only to fair value adjustments above the CGT valuation date value of the asset.