Deferred Tax (AS 22)
This query is : Resolved
23 May 2008
As per AS-22, Deferred Tax (Asset or Liability) should be recognised only when there is a temporary difference between taxable income and accounting income.
Now as per AS-31, The Financial Instruments need to be marked to market and recognise the anticipated losses in books. Since these losses are not recognised by income tax. This will give rise to a difference between taxable income & accounting income.
But I am uncertain about the type of difference it should be referred to - permanent or temporary.
The reason being if the actual sale of instrument results in profit, the anticipated loss becomes a permanent difference, as no loss occurs at any time and was never reversed.
Now as per AS-31, The Financial Instruments need to be marked to market and recognise the anticipated losses in books. Since these losses are not recognised by income tax. This will give rise to a difference between taxable income & accounting income.
But I am uncertain about the type of difference it should be referred to - permanent or temporary.
The reason being if the actual sale of instrument results in profit, the anticipated loss becomes a permanent difference, as no loss occurs at any time and was never reversed.
23 May 2008
i think in this case we should consider these losses as temporary difference, because later we may be able to sell them at profit as u mentioned, unless there is permanent devaluation.
if later these are sold at profit, u should write back the deferred tax asset created earlier with proportionate amount.
if later sold at loss, u write back the deferred tax asset created earlier with proportionate amount and treat extra loss as permanent difference.
in both cases, the DTA created earlier has to go.
if later these are sold at profit, u should write back the deferred tax asset created earlier with proportionate amount.
if later sold at loss, u write back the deferred tax asset created earlier with proportionate amount and treat extra loss as permanent difference.
in both cases, the DTA created earlier has to go.
03 June 2008
replied
18 June 2008
yes but is there any notification to substaintiate this
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
Unanswered Queries
- CAPITAL GAIN BASE ON NOTIFICATION
- Form 140 tds
- Taxable or Tax exempt
- NRI starting business in India
- ITDS U/S.194T of Firm
- ADVANCE PAYMENT OF ADVOCATE
- CREDIT NOTES WITHOUT GST
- Non-Compliance documents have not been submitted by the contractors debited
- TDS ON EMAIL DOMAIN SERVICE BILL
- TDS Return Q1 FY 2026-27
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
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
