Reference no: EM132954556

Interim Financial reporting IAS 34 is an old standard that has been in operation for a long time. It is one of the easiest standards to understand. The owner Director of Big Mama Ltd has however no understanding of the Accounting standards. In the absence of the company's expert Accountant the owner Director of Big Mama has approached you for assistance with the following IAS 34 issue:
Big Mama is a manufacturing entity with a 31 December year end The entity had an assessed loss of N$200 000 for the year ended 31 December 2020. No deferred tax asset has been recognized for the loss. Big Mama reports on 30 June 2021 on the interim results for the 6 months then ended. For the first 6 months of the 2020 financial year the company earned N$500 000 and expects to earn N$600 000 in the remaining 6 months. Assume a tax rate of 32% is applicable in the Namibian jurisdiction in which Big Mama operates

Required

Problem 1: Prepare a Memo to the Director explaining to him the key tax implications of IAS 34: Interim Financial reporting. In the Memo Calculate the income tax expense to be reported in the interim report for the six Months ended 30 June 2021 in compliance with IAS 34.