Case study 5: Part 1: There had been a group discussion on various aspects related to accounting amongst few graduates. Each graduate had come up with an opinion about the topics that are been discussed below. You are required to review each of the discussion and validate their opinion with required explanation. Also, you need to provide the correct opinion in case you disagree with all the opinions. (2 marks - Min 100 words) Discussion: In the understanding of deferred tax one must be clear about the presence of temporary and permanent timing differences. Moreover, such differences only appear if you are preparing financial statement on two different basis especially for taxation purpose. Graduate I mentioned that deferred tax does not occur because of timing difference and moreover the company is not allowed to prepare financial statements on different basis whatsoever. The company only must follow IFRS in preparation of financial statements. Graduate 2 stated that deferred tax is because of permanent timing differences and such difference does arise due to use of different basis in preparation of financial statement Graduate 3 stressed upon the fact that deferred tax is due to temporary timing difference, but the company need not follow different basis for preparation of financial statements Graduate 4 mentioned that deferred tax cannot be due to timing difference, but the company has the freedom to follow different basis for preparation of financial statements Part 2: You are a junior accountant who is involved in tax related matters of the company. The senior accountant has provided with a scenario related to deferred taxes which you need to deal with. The tax rate is 15%. The Company has purchased a plant in the year 2015 for RO 200,000. The plant is estimated to have 10 years of useful life. It was decided that for the book puposes the depreciation rate to be used should be 10% straight line method. But for the tax purposes the depreciation rate to be used is 13.333% on cost. The company wants to know the deferred tax amounts that will be generated due to such plant depreciation over the lifetime of the asset You are required to provide a detailed calculation for the above situation along with necessary comments showing deferred tax movement over the life of the asset