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IAS12 A change in tax rates effects a) a deferred tax but not currant tax b)...

IAS12
A change in tax rates effects
a) a deferred tax but not currant tax
b) both current tax snd deferred tax
c) current tax but not deferred tax
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Answer #1

A changes in tax rates effect both current tax and deferred tax. It effects both the taxes as current taxes are those which are not yet paid and will pay in the current year so the changes in tax rates will effect the current taxes. On the other hand deferred taxes are those which the taxes of current period but not been paid, these are recorded in the current year because of the transaction is already made, these taxes are paid by company in the future period. So the changes in the tax rate will effect both type of taxes.

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