Tax Part 6

Quick reference

• 00:05 I think you'll agree last time session was not look friendly session over look
• 00:08 calculate in the tax appreciation.
• 00:11 This time out where going to bring in the accounting deprecation and compare it to
• 00:15 the tax appreciation to work out the impart of different types liabilities.
• 00:20 Let's move on.
• 00:21 This tax just never ends, does it?
• 00:24 Let's go back to our calculations then,
• 00:26 and we're going to calculate this time the accounting depreciation, and
• 00:31 compare it to the tax depreciation, so did I say calculate it?
• 00:34 We've already done it, haven't we?
• 00:36 If we go to row 193, it's there.
• 00:42 There it is, total depreciation.
• 00:45 I think that's worth another row filter, don't you?
• 00:48 So that's gonna take one of these again.
• 00:51 Copy, scroll down here, control V,
• 00:55 that should be 193, follow.
• 01:00 And I'm going to make this equal to some of those above, so I'm just going to copy
• 01:04 that, control c, control v, this is the whole idea of consistency.
• 01:07 You can just take things from everywhere.
• 01:08 You see? That's summing those, everything working.
• 01:11 I'm completely lazy, lazy modeling is not good.
• 01:15 Lazy modeler, fine, being effective and efficient.
• 01:18 And if I made a mistake with this formula, I might have noticed it when I copied it
• 01:21 down here, that's why it's good to copy believe it or not.
• 01:25 Right, now we need to look at the depreciation time and difference.
• 01:27 If you recall we're looking here about the time and
• 01:30 difference causes differed tax liabilities in the theory section.
• 01:34 So, let's bring in the account and the depreciation just from there again.
• 01:39 The tax depreciation is then subtracted from that, so
• 01:44 that equals minus row 297 here and then we just sum them.
• 01:54 Now I don't like the way the minus sign's down here at the moment.
• 01:56 So that's okay, I'm going to back, and I'm going to install this as a number.
• 02:02 Done, lovely.
• 02:04 Making sense?
• 02:05 So we've got here our actual calculations.
• 02:08 My tax rate, I need to bring that in, well I calculated that don't forget when I was
• 02:13 doing the interest receivable and revenues, so we can bring this through.
• 02:18 So let's go and get this up here, there it is there in mode 273, copy that across.
• 02:26 Now this is my actual depreciation timing difference.
• 02:31 I've got to actually star that one as well.
• 02:34 What I want to do now is multiply by the tax rate,
• 02:37 because it's the depreciation timing difference multiplied by the tax rate.
• 02:40 It gives me my tax effected amount.
• 02:42 That's the one that goes on the balance sheet.
• 02:44 And because it's good news now, bad news later, remember the Liam
• 02:48 theory of smiley faces, that's going to be a deferred tax liability movement.
• 02:53 So that is simply going to be this times that.
• 02:56 But remember liabilities on the balance sheet are shown as positive numbers, so
• 03:00 I've actually got to put a minus sign in front of the calculation as well, so
• 03:04 that it has the right signage when we link it.
• 03:06 So it equals minus the depreciation time and difference,
• 03:10 J 307, multiplied by the tax rate.
• 03:12 I don't like that being a solid line,
• 03:14 I'm actually going to style it as a line count and copy that across.
• 03:18 Lovely, I've got my movement in my deferred tax liabilities.
• 03:22 Now this is balance sheet.
• 03:24 Now unfortunately, movements in balance sheet don't go on the balance sheet.
• 03:28 It's the running total, remember your P and L and your cash flow are for
• 03:32 periods of time, but your balance sheet is at a point in time.
• 03:35 It's a snapshot, so it shows the running total.
• 03:38 So I need to keep a running total,
• 03:40 in other words I need to bring in a mini P and L.
• 03:43 Now I've got my closing differ tax liability here which believe it or not,
• 03:48 I also put here this DTA and DTL on my assumption sheet,
• 03:50 because that's important to me.
• 03:52 I could have linked them straight from the opening bar sheet which is where they come
• 03:56 from, but I have linked it through there so people can follow it.
• 03:59 And this is simply going to be the previous periods closing balance.
• 04:04 This is simply going to be the sum of the two rows above.
• 04:07 So Ctrl+C and highlight these and paste special as formulas.
• 04:14 Brilliant, and the movement deferred tax liability.
• 04:17 It's really, really complicated here.
• 04:19 It's simply going to equal that number copied across.
• 04:22 Now this is what's going to go into the balance sheet.
• 04:25 These are the numbers we're going to put in.
• 04:26 You see here, well you don't see it, and I'm going to click on this.
• 04:29 You see that says BS, it's not some sort of explanation for what I'm doing.
• 04:33 It is actually standing for balance sheet.
• 04:35 That is saying, this is the number that goes into the balance sheet, but
• 04:39 these numbers, if you're going to go into my overall control count.
• 04:42 Remember that big text control count what we're building up,
• 04:45 that's going to have six line items in.
• 04:47 It's gonna have VAT in it, but that one going into the balance sheet.
• 04:52 Okay.
• 04:53 So that is now our depreciation time and
• 04:55 difference calculated, we've worked out our movement and deferred tax liability,
• 04:58 simply the tax effected version of the depreciation of time of difference.
• 05:02 And calculated the running total to work out our DTL.
• 05:05 We'll move onto working out the tax payable and
• 05:08 paid, and we'll do that in the next session.

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