Under AASB 112's approach to accounting for income taxes,a taxable temporary difference creates which account?

Question

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A taxable temporary difference creates a deferred tax liability, as the tax payable on the temporary difference will be deferred until a future period when the asset is realized or the liability is settled. Choice A (Provision for tax payable) is incorrect as it relates to current tax obligations. Choice B (Deferred tax asset) is incorrect as taxable temporary differences do not create assets, but rather liabilities. Choice C (General reserve) is incorrect as this does not relate to income taxes. Choice E (None of the given answers) is incorrect as one of the answers is correct.

Under AASB 112's Approach to Accounting for Income Taxes,a Taxable