65. A company has recently revalued one of its depreciable properties and estimated that its
remaining useful life would be another 20 years. The applicable tax rate for all years is 30% and
the revaluation of the property is not recognized for tax purposes. Details related to this asset
are provided in the table below, with all £-values in millions.
Accounting
Tax
Purposes
Original values and estimates, start of 2007
2007 Acquisition cost £8,000 £8,000
Depreciation, straight-line 20 years 8 years
Accumulated depreciation end of 2009 £1,200 £3,000
Net balance end of 2009 £6,800 £5,000
Re-estimated values and estimates, start of 2010
Revaluation balance start of 2010 £10,000 Not applicable
New estimated life 20 years
The deferred tax liability (in millions) as at the end of 2010 is closest to:
A. £690.
B. £960.
C. £1,650.
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