CFAI Text Vol 3 P511~512
Anyone has a good understanding regarding those statements in last 2 paragraphs on P.511 and the subsequent 2 paragraphs on P.512 ? I just can not catch it at all !!!
What is the (deferred) tax effect ? What are the " tax provi s ion" in last paragraph on P.511 and the " revaluation reserve" in 2nd paragraph on P.512 ?
Is it that the increase in carrying amount of $300,000 in the “revaluation surplus” account under equity is allocated to tax provision ($120,000 = $300,000 x 40%) and retained earning ($180,000 = $300,000 - $120,000) ? What are those statements in 2nd paragraph mean ?