Acca financial Accounting (FA) Study Text ac ca (FA)

Capital structure and finance costs 

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KAPLAN PUBLISHING

 

These estimates are unlikely to be entirely accurate (they are usually a 'best 

estimate' when the accounts are being prepared) and, as such, companies tend 

to either over or under estimate the provision for income tax, which is adjusted 

for in the following year's accounts. 

You will not be required to have any tax-related knowledge to calculate tax 

charges. For the purposes of Financial Accounting, you are required to 

understand how income tax charges and liabilities are accounted for in limited 

company financial statements. In many ways, it is similar to accounting for a 

provision – recognise a liability when required, with any movement in the liability 

accounted for in profit or loss.