deferred tax

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SREE PRAKASH (Querist)
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13 August 2010 Sir,
A public limited company is making loss for the last two years.The balance sheet shows accumulated loss.The query is whether the company has to show Deferred tax on accumulated loss?. If so how ?
Please advice.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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13 August 2010 Where an enterprise has unabsorbed depreciation or carry forward of losses under tax laws, deferred tax assets should be recognised only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised.

If there is no certainity that there will be profits in future then Deferred tax asset cannot be made and should not be made.

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CA SMR

CA SMR (Expert)
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13 August 2010 The nature of the evidence supporting the recognition of deferred tax assets should be disclosed, if an enterprise has unabsorbed depreciation or carry forward of losses under tax laws.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 August 2010 Clause 32 of AS-22 of Companies (Accounting Standards) Rules,2006 may be referred for Sukanya Ji's observation.

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