The following are independent situations which occurred in CTC

e) A company properly uses the equity method to account for its 30% investment in another taxable Canadian corporation. The investee pays non-taxable dividends that are about 10% of its annual earnings.

f) Management determines that the net realizable value of the inventory is below cost, causing a write-down in the current year.

g) A company reports a contingent loss (ASPE) or provision (IFRS) that it expects will result from an ongoing lawsuit. The loss is not reported on the current years tax return. Half the loss is a penalty it expects to be charged by the courts. This portion of the loss is not a tax-deductible expenditure, even when it is paid.

h) The company uses the revaluation model for reporting its land and buildings. Due to current economic conditions, the fair value of the properties declined and the write- down was recorded against the revaluation surplus reported in equity.

Required: For each of the situations above:

1) Indicate whether it results in a reversing (timing) difference or a permanent difference in the year. Be sure to note any differences between ASPE and IFRS.