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CIMAPRA19-F02-1 Exam - Topic 1 Question 116 Discussion

AB's financial information shows that thenon current assets' carrying value is greater than the tax base at the year end.What is the journal entry to record the movement in the provision for deferred tax resulting from this difference?
C) Dr Tax expenseCr Deferred tax provision
A) Dr Deferred tax provisionCr Tax expense
B) Dr Deferred tax provisionCr Other comprehensive income
D) Dr Other comprehensive incomeCr Deferred tax provision

CIMAPRA19-F02-1 Exam - Topic 1 Question 116 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam
Question #: 116
Topic #: 1
[All CIMAPRA19-F02-1 Questions]

AB's financial information shows that thenon current assets' carrying value is greater than the tax base at the year end.

What is the journal entry to record the movement in the provision for deferred tax resulting from this difference?

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Suggested Answer: C

by Reita at Aug 15, 2025, 04:32 PM

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Aileen
6 months ago
This seems too straightforward, are we missing something here?
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Loren
7 months ago
Wait, why would it go to other comprehensive income? That seems off.
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Paris
7 months ago
I thought it was option A at first, but now I'm not so sure.
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Vashti
7 months ago
Definitely, it's gotta be option C!
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Deonna
8 months ago
The carrying value being greater means a deferred tax liability, right?
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Glen
8 months ago
I’m a bit confused about whether to debit the deferred tax provision or the tax expense. I wish I had reviewed that section more thoroughly.
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Keneth
8 months ago
This question feels similar to one we practiced where the carrying value exceeded the tax base. I think it was option C, but I might be mixing it up.
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Isaiah
9 months ago
I remember something about deferred tax provisions being linked to comprehensive income, but I can't recall if that's relevant here.
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Marya
9 months ago
I think the journal entry should involve debiting the tax expense since we're recognizing a deferred tax liability, but I'm not entirely sure.
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Lashawn
9 months ago
I'm not totally sure about this one. I'll need to review my notes on deferred tax accounting to make sure I understand the proper treatment for this situation.
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Janae
9 months ago
Okay, I've got this. The key is to recognize that since the carrying value is greater than the tax base, there will be a deferred tax liability. The journal entry should be to debit the deferred tax provision and credit tax expense.
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Felice
9 months ago
Hmm, I'm a bit confused by the wording here. I'll need to re-read the question and think through the implications of the difference between the carrying value and tax base.
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Lashanda
9 months ago
This question is testing my understanding of deferred tax accounting. I'll need to carefully consider the relationship between the carrying value and tax base of the non-current assets.
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Marge
10 months ago
Option A is the correct answer. You need to debit the deferred tax provision and credit the tax expense to record the movement in the provision for deferred tax.
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Flo
7 months ago
Option A is clear and straightforward.
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Belen
7 months ago
I think option A makes sense.
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Rikki
8 months ago
Agreed! It aligns with the tax expense recording.
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Maryann
8 months ago
Definitely, debiting the provision is the way to go.
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Amira
11 months ago
I think the answer is A.
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