Under IAS 12, Step 1 in calculating deferred taxes is to identify assets and liabilities whose values differ for accounting and tax purposes. Which option describes Step 1?

Under IAS 12, Step 1 in calculating deferred taxes is to identify assets and liabilities whose values differ for accounting and tax purposes. Which option describes Step 1?

• A. The tax rate to be applied.
• B. Temporary differences between tax bases and carrying amounts.
• C. The timing of recognition of revenue.
• D. The effect of temporary differences on equity.

Answer: (B)