RE: RE: Albanian Tax Code - Deferred income tax
Forget a step. The $9M expense literally represents the differences in future tax payable based on carrying value of the accounting vs. tax PPE assets so you need to tax effect the carrying values of each. Let's round the actual accounting varrying value of PPE per Stream's BS of $58M to $60M. You would need a tax carrying value of $30M for the equivalent PPE per below.
Assuming a 30% tax rate the difference could arise from these values at year end
Accounting carrying value: $60M x 30% = $18M in future tax shield
Tax carrying value: $30M x 30% = $9M in future tax shield
$18M - $9M = $9M deferred income tax expense and the year end entry in my previous post is the same.
Same rule applies – deferred income tax expense caused when tax carrying value is less than accounting carrying value.
If you really read into it it is because the Albanian tax regime likely allows accelerated depreciation of PPE on a basis other than unit-of-production.
Again simply example and there are a lot of other variables that play into the calculation.