Deferred tax assets & liabilities
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 July 2012
Hi
Can anyone explain the concept of Deferred tax assets & liabilities.?
Can anyone explain the concept of Deferred tax assets & liabilities.?
13 July 2012
Dear Author,
Please read AS 22 first then ask for specific query/problem in this regard.
Please read AS 22 first then ask for specific query/problem in this regard.
13 July 2012
Deferred tax is the tax effect of timing differences that arises between taxable income and accounting income for a period that originate in one period and are
capable of reversal in one or more subsequent periods.
Accounting income (loss) is the net profit or loss for a period, as reported in the statement of profit and loss, before deducting income tax expense or adding income tax saving.
Taxable income (tax loss) is the amount of the income (loss) for a period,
determined in accordance with the tax laws, based upon which income tax payable (recoverable) is determined.
capable of reversal in one or more subsequent periods.
Accounting income (loss) is the net profit or loss for a period, as reported in the statement of profit and loss, before deducting income tax expense or adding income tax saving.
Taxable income (tax loss) is the amount of the income (loss) for a period,
determined in accordance with the tax laws, based upon which income tax payable (recoverable) is determined.
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13 July 2012
Pl see the points given below.
1.Source:-
AS-22 deals with deferred tax.
2.Focus:-
It is based on the matching concept.
3.Reason:-
Accounting income and taxable income may differ on account of various reasons.
4.Measurement:-
The difference as aforesaid is itemized and permanent differences are eliminated. The rest is called timing difference.
5.Timing difference:-
Those differences which lead to either saving in tax or payment of tax in the current year in the manner that such saving or payment is nullified in later years.
6.Recognition:-
Deferred tax should be recognized for all timing differences subject to consideration of prudence in respect of deferred tax assets.
7.Rates:-
Deferred tax is to be recognized using the tax rates that have been enacted on the balance sheet date. If not enacted can be measured on the tax laws that have been substantially enacted as on the b/s date.
8. Positioning:-
Deferred tax asset/liability should be disclosed separately from current assets and current liabilities in the b/s.
9.Disclosure:-
In the notes on accounts compliance of AS 22 may be mentioned as well as the workings of the deferred tax may be given.
1.Source:-
AS-22 deals with deferred tax.
2.Focus:-
It is based on the matching concept.
3.Reason:-
Accounting income and taxable income may differ on account of various reasons.
4.Measurement:-
The difference as aforesaid is itemized and permanent differences are eliminated. The rest is called timing difference.
5.Timing difference:-
Those differences which lead to either saving in tax or payment of tax in the current year in the manner that such saving or payment is nullified in later years.
6.Recognition:-
Deferred tax should be recognized for all timing differences subject to consideration of prudence in respect of deferred tax assets.
7.Rates:-
Deferred tax is to be recognized using the tax rates that have been enacted on the balance sheet date. If not enacted can be measured on the tax laws that have been substantially enacted as on the b/s date.
8. Positioning:-
Deferred tax asset/liability should be disclosed separately from current assets and current liabilities in the b/s.
9.Disclosure:-
In the notes on accounts compliance of AS 22 may be mentioned as well as the workings of the deferred tax may be given.
Message likes :
1 times
13 July 2012
AGREE...AS-22
DTA:-
ARISE WHEN INCOME AS PER INCOME TAX IS HIGHER THAN INCOME AS PER BOOKS& ACCOUNTS.
DTL:-
JUST OPPOSITE OF ABOVE.
DTA:-
ARISE WHEN INCOME AS PER INCOME TAX IS HIGHER THAN INCOME AS PER BOOKS& ACCOUNTS.
DTL:-
JUST OPPOSITE OF ABOVE.
Message likes :
1 times
13 July 2012
YES SIR I AGREE WITH YOU..
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