Preheat your oven to 350°F (175°C). Grease and flour two 9-inch round cake pans to prevent sticking.

In a large mixing bowl, whisk together the sifted flour, baking powder, baking soda, cinnamon, nutmeg, and salt. This ensures even distribution of the leavening agents and spices.

In another bowl, beat the granulated sugar and vegetable oil together until well combined. Add the eggs one at a time, mixing well after each addition. This helps to incorporate air into the batter, making the cake light and fluffy.

Gradually add the dry ingredients to the wet ingredients, mixing until just combined. Do not overmix, as this can lead to a dense cake.

Fold in the grated carrots, crushed pineapple, and chopped walnuts (if using) with a rubber spatula. This adds moisture and flavor to the cake.

Divide the batter evenly between the prepared cake pans. Smooth the tops with the spatula.

Bake in the preheated oven for 30-35 minutes, or until a toothpick inserted into the center comes out clean. This ensures the cake is baked through.

Once baked, remove the cakes from the oven and let them cool in the pans for 10 minutes. Then, turn them out onto a cooling rack to cool completely.

In a mixing bowl, beat the softened cream cheese and butter together until smooth and creamy. This creates a light and fluffy frosting.

Gradually add the sifted powdered sugar and vanilla extract, mixing until well combined and smooth. Adjust the consistency with a little milk if necessary.

Once the cakes are completely cool, place one layer on a serving plate. Spread a generous layer of cream cheese frosting on top.

Place the second layer on top and frost the top and sides of the cake with the remaining cream cheese frosting.

If desired, sprinkle shredded coconut on top and decorate with candy carrots for a festive touch.