AASB 134 - Interim Financial Reporting - July 2004
Difference in Annual Reporting Period anDifference in Annual Reporting Period and Tax Year
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Difference in Annual Reporting Period and Tax Year
B17 If the annual reporting period and the income tax year differ, income tax expense for the interim periods of that annual reporting period is measured using separate weighted average estimated effective tax rates for each of the income tax years applied to the portion of pre-tax income earned in each of those income tax years.
B18 To illustrate, an entity’s annual reporting period ends 30 June and it reports quarterly. Its taxable year ends 31 December. For the annual reporting period that begins 1 July, Year 1 and ends 30 June, Year 2, the entity earns 10,000 pre-tax each quarter. The estimated average annual income tax rate is 30 per cent in Year 1 and 40 per cent in Year 2.
| QuarterEnding30 Sept.Year 1 | QuarterEnding31 Dec.Year 1 | QuarterEnding31 Mar.Year 2 | QuarterEnding30 JuneYear 2 | YearEnding30 JuneYear 2 | |
|---|---|---|---|---|---|
| Taxexpense | 3,000 | 3,000 | 4,000 | 4,000 | 14,000 |