AS-22 Doubts....Urgent Sir!!!

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Rajesh (Querist)
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02 September 2010 Dear Experts,
Very Urgent Sir!!
The assessee is a firm.
This is the first year in which DTA or DTL has to be created.
The timing difference which is capable of reversal during the subsequent period which i have found is only 43B payments which comes around 1 lakhs.

Please explain and tell to me what is the amount i have to debit in P&L account and what is the amount i have to show in the Balance Sheet.

Please provide me the journal entries to record both in the P&L account and Balance Sheet.

Fortunately since this is the first time we are going to create DTA or DTL reversal of earier years and all does not arises.

Expecting the reply and thanks in advance.
Please explain me detailedly and step by step. It would be a great help for me...for everyone who helps me in this urgent situvation.

Is there any book available for Accounting Standards-22 which provides me detailed and step by step approach for practical usage purpose. ( I already have Students Guide to AS - DS Rawat; for my calibre i am unable to have a grip on it.)
With regards,
Rajesh.

shakuntala chhangani

shakuntala chhangani (Expert)
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25 September 2010 Hi Rajesh, u can buy T.P. Ghosh for the same. the answer to ur query is :
1) calculate tax as per IT Act. It will be ur current tax.
2) since the diference between accounting income and tax income is only on account of disallowance u/s 43B, Taxable income will be more than a/c income.
3)since there is disallowance of 43B item under IT, taxable income under IT is more, u need to pay more tax as compared to tax on accounting income considering all timing difference
4) extra tax paid due to timing diff. is Deferred Tax Asset (DTA)which is Rs. 1,00,000 * tax rate of NEXT YEAR
5)PASS THE FOLLOWING ENTRIES :
P/L A/c Dr. xx
To Current Tax A/c (Tax as per IT) xx
DTA A/c Dr. xx
To P/L A/c xx (tax effect of timing difference i.e. 1,00,000 * next yrs tax rate)
Regards, CA Shakuntala Chhangani

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