Question

Tax rates other than the current tax rate may be used to calculate the future income tax amount on the sfp if:___.select answer from the options below

a. it appears likely that a future income tax rate will be higher than the current tax rate.
b. the future income tax rates have been enacted or substantively enacted into law.
c. it is probable that a future income tax rate change will occur.
d. it appears likely that a future income tax rate will be less than the current tax rate.

Answer 1

The correct option is B: the future income tax rates have been enacted or substantively enacted into law. This means that there is a high probability that the future tax rates will come into effect.

Step-by-step explanation:

The correct answer to this question is Option B: the future income tax rates have been enacted or substantively enacted into law. When calculating the future income tax amount on the Statement of Financial Position (SFP), tax rates other than the current tax rate may be used if the future income tax rates have been enacted or substantively enacted into law. This means that there is a high probability that the future tax rates will come into effect.

For example, if a government announces a tax rate increase that will be effective in the next financial year, the company will need to use the new tax rate to calculate the future income tax amount on the SFP.