Deferred Tax
This query is : Resolved
29 August 2010
Respected All,
In the F.Y. 08-09, a company wrongly treated deffered tax asset as a deffered tax liability in accounts.
How will the company rectify this mistake in the Balance sheet of 09-10.
Please explain the disclosures to be made in the Balance sheet and entries to be made in accounts.
Regards
Jyoti
In the F.Y. 08-09, a company wrongly treated deffered tax asset as a deffered tax liability in accounts.
How will the company rectify this mistake in the Balance sheet of 09-10.
Please explain the disclosures to be made in the Balance sheet and entries to be made in accounts.
Regards
Jyoti
29 August 2010
Accounting entries for the FY 09-10
i. To nullify the effect of 08-09 mistake
Deferred Tax Liability Dr
To P/L
ii.To effect the rectification entry
Deferred TAx Assets Dr
To P/L
iii,Reversal of timing difference if applicable.
Disclosure
The effect of the rectification should be disclosed as prior period item in the statement of profit & loss account as per the AS 5.
i. To nullify the effect of 08-09 mistake
Deferred Tax Liability Dr
To P/L
ii.To effect the rectification entry
Deferred TAx Assets Dr
To P/L
iii,Reversal of timing difference if applicable.
Disclosure
The effect of the rectification should be disclosed as prior period item in the statement of profit & loss account as per the AS 5.
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