Abstract
M.Com. (Accounting)
This study examines the disclosure of taxation in company financial
statements.
The following aspects were discussed:
(a) The taxation expense in the income statement comprises of a current
tax charge and deferred tax provision.
(b) The extent of the recognition of the tax effects of timing
differences in company financial statements.
(c) The alternative measurement methods which can be applied to either
partial or full allocation.
(d) The effect of tax allocation on company financial statements 1n the
United Kingdom, Canada and the United States of America.
(e) Discounting of the deferred tax credit.
(f) The development of generally accepted accounting practice ln South
Africa relating to tax allocation.
The discussion indicates that the South African statement with regard to
the disclosure of taxation, promotes the usefulness of published financial
information even though it is not free of criticism.
A number of recommendations are made by which the problems currently being
encountered with the South African statement on the disclosure of taxation
in company financial statements, can be addressed.