The Accounting Treatment Of Income Tax After Rent Is Important.

The enterprise uses the real estate that is originally used for daily production of goods, provides labor services, or manages and rents for rent. It usually adopts the cost mode or the fair value mode to carry out subsequent measurement.

However, the same enterprise can only adopt one mode to carry out subsequent measurement of all investment real estate and not adopt two measurement modes at the same time.

When a private property is converted to a rental business, according to the provisions of the accounting standards for Enterprises No. third - investment real estate, it is necessary to pform the non investment real estate into the accounting method of investment real estate.

Investment real estate refers to the real estate held for rent or capital appreciation or both.

It mainly includes the land tenure, the land use right and the rental buildings that have been held and ready for increment.

The following measurement of investment real estate should be noted:

1. the measurement models of investment real estate must not be changed arbitrarily.

2. change from cost mode to fair value.

Should be treated as a change of accounting policy, adjust the initial retained earnings (undistributed profit) when the difference between the fair value and the book value is changed.

3. the investment real estate that has been measured by the fair value model must not be converted from the fair value mode to the cost mode, that is, irreversible.

4. adoption

The mode of subsequent measurement shall not be used to depreciate or amortize the investment real estate. The book value shall be adjusted on the basis of the fair value of the investment real estate on the balance sheet date. The difference between the fair value and the original book value shall be recorded in the current profit and loss (the profit and loss of the fair value change).

Investment real estate acquired

It is recognized as other business income.

The fair value model is adopted for subsequent measurement, and no impairment test is conducted for investment real estate.

5. according to the "accounting standards for Enterprises No. eighteenth - income tax", in the case of calculating the income tax by the balance sheet liability method, enterprises should generally calculate the income tax on each balance sheet date.

Case: a company signed a lease agreement with the B enterprise to lease the original office building for the use of the second enterprise. The rental date begins on March 31, 2014.

In March 31, 2014, the book balance of the office was 500 million yuan, accumulated depreciation of 100 million yuan, and the fair value of 460 million yuan. A company used the fair value model for subsequent measurement of the investment real estate.

Assuming that the tax base of the office is equivalent to book value before conversion, the tax law stipulates that the office is expected to have a useful life of 20 years without residual value.

In December 31, 2014, the fair value of the office was 480 million yuan.

The entry is as follows:

The book value of the office in March 31, 2014 (measured at fair value) is 460 million yuan, and the tax base is =50000-10000=40000 (10000 yuan), resulting in a taxable temporary difference of =46000-40000=6000 (10000 yuan). The deferred income tax liability should be recognised as =6000 * 25%=1500 (10000 yuan).

Borrowing: investment real estate - cost 46000

Accumulated depreciation 10000

Loans: fixed assets 50000

Other comprehensive income 6000

Borrow: other comprehensive income 1500

Loan: deferred income tax liability 1500

In December 31, 2014, the book value of investment real estate was 480 million yuan, the tax base = (50000-10000) - (50000-10000) 20 x 9 12=38500 (10000 yuan), resulting in a taxable temporary difference of =48000-38500=9500 (10000 yuan), and the deferred income tax liability =9500 * 25%= 2375 (10000 yuan) should be recognized.

Due to the difference between the fair value of the investment real estate and the book value of the original non investment real estate is included in other comprehensive income, the corresponding subject of the deferred income tax liability is also the other comprehensive income.

The entry is as follows:

Borrow: income tax expense 875 (2375-1500)

Other comprehensive income 1500

Loan: deferred income tax liability 2375.

Note: enterprises will be converted into real estate as an investment in real estate, and the fair value should be used. According to the fair value of the stock on the date of conversion, the subject of "investment real estate cost" will be debited. According to the book balance, the products of development will be credited, and the "other comprehensive income" subject (the credit balance) should be credited or the fair value change profit and loss account (the debtor balance) will be credited according to its balance.