Scribd
Upload
176 views1 page

PAS 12: Income Tax Accounting Guide

This document discusses Philippine Accounting Standards (PAS) 12 regarding income taxes. It explains that PAS 12 prescribes the accounting treatment for income taxes and defines accounting profit/loss, which is computed using Philippine Financial Reporting Standards, and taxable profit/loss, which is computed using tax laws. As an example, it provides the case of an entity that accrued a bad debt expense under financial reporting that is tax deductible only when deemed worthless, and asks the reader to calculate the accounting income, taxable income, and current tax expense based on the facts provided.

Uploaded by

Patawaran, Janelle S.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
176 views1 page

PAS 12: Income Tax Accounting Guide

This document discusses Philippine Accounting Standards (PAS) 12 regarding income taxes. It explains that PAS 12 prescribes the accounting treatment for income taxes and defines accounting profit/loss, which is computed using Philippine Financial Reporting Standards, and taxable profit/loss, which is computed using tax laws. As an example, it provides the case of an entity that accrued a bad debt expense under financial reporting that is tax deductible only when deemed worthless, and asks the reader to calculate the accounting income, taxable income, and current tax expense based on the facts provided.

Uploaded by

Patawaran, Janelle S.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

INCOME TAXES

Philippine Accounting Standards (PAS) 12

Objective and Scope


PAS 12 is to prescribe the accounting treatment for
income taxes.

Accounting profit vs. Taxable profit


For purposes of PAS 12, Income Taxes refer to taxes
that are based on taxable profit
1. Acounting Profit or Loss
 Computed using PFRSs
 Total income less total expenses,
excluding tax expense
 Other term: taxable income financial
income and accounting income
2. Taxable Profit (Tax Loss)
 Computed using tax laws
 Taxable income less taxed ductible
expenses
 Other terms: pretax income,

I.E. Entity A accrues bad debts expense of P100 under


financial reporting. However, under taxation, this
amount is tax deductible only when it is deemed
worthless. Profit before bad debts is Php1,000.

Requirement: How much is the accounting income and


taxable income? Assuming tax rate is 30%, how much is
the income/current tax expense?

You might also like