Calculation of Defered TAx liabilities and Assets
This query is : Resolved
25 July 2008
Hi
could you Please provide me the step to calculate the deffered tax liability and assets calculation.
could you Please provide me the step to calculate the deffered tax liability and assets calculation.
25 July 2008
I will provide you the formula which may be taken as a Golden Rule for the calculation of deferred tax asset or liability
steps:
1. Analyse and compare the WDV as books and Income tax as on the date of balance sheet. In case, the WDV as per books is more, a liability is to be created otherwise an asset.
2. Take out the difference of the two WDVs as said above. Apply current tax rates on the difference in WDVs, it will be ur liability or asset requirement as on the date of B.sheet for current year.
3. The difference of liability/asset as on CY b.sheet and LY B.Sheet may be adjusted to P & L a/c to make the figures to the CY requirement.
4. All other timing differences may be compared in the similar way. Say, there is increase in the figure of CF losses then the current rate applied on the new CF loss will be the requirement of asset as on date.
steps:
1. Analyse and compare the WDV as books and Income tax as on the date of balance sheet. In case, the WDV as per books is more, a liability is to be created otherwise an asset.
2. Take out the difference of the two WDVs as said above. Apply current tax rates on the difference in WDVs, it will be ur liability or asset requirement as on the date of B.sheet for current year.
3. The difference of liability/asset as on CY b.sheet and LY B.Sheet may be adjusted to P & L a/c to make the figures to the CY requirement.
4. All other timing differences may be compared in the similar way. Say, there is increase in the figure of CF losses then the current rate applied on the new CF loss will be the requirement of asset as on date.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Taxation of crypto futures in India Fy 2026- 2027
- Transfer of Physical Stock Between Two Proprietorship Concerns
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Issuing of delivery challan by seller of goods
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
