Balance Sheet and Deferred Tax

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From its origins in 1914 as a Western Australian farmers' cooperative, Wesfarmers has grown into one of Australia's largest listed companies. Headquartered in Western Australia, its diverse business operations covers supermarkets and department stores; home improvement and office supplies; coal mining; insurance; chemicals, energy and fertilisers; and industrial and safety products. Wesfarmers is one of Australia's largest employers and has a shareholder base of approximately 500, 000.

Subsidiaries of Wesfarmers

Wesfarmers owns vast range of subsidiaries ranging from retail industry to insurance and chemicals and energy sectors all the below subsidiaries are 100 % owned and controlled by Wesfarmers Ltd otherwise the controlling
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The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
Journal Entries of land where its Fair Value appreciated which creates Deferred Tax Liability is as follows:

Land Dr

Deferred Tax Liability Cr


Subsequently when the liability has been settled with Income Tax the entries would be as follows:

Deferred Tax Liability Dr

Income Tax Expense Cr

In the case of Wesfarmers Ltd it reviews Fair Value of the Assets acquired assets and if the fair value of the assets is increased it will give rise to Deferred Tax Liabilities which stood at 552 m, However Wesfarmers have Deferred Tax Assets resulting from decrease in the Fair value of the Different Class of Assets and increase in Fair Value of Liabilities which was 1027 m which could be net off against Deferred Tax Liabilities resulting 475 m Net Deferred Tax
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