deffered tax

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ABY VARGHESE

ABY VARGHESE (Querist)
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26 July 2010 how will treat unubsorbed depreciation for current previous year and for preceeding previous years

srinath

srinath (Expert)
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26 July 2010 for the purpose of treating the unabsorbed depreciation if there is virtual certainity tat the company wil earn profits in the near future then deferred tax asset can be created

virtual certainity is required and not just reasonable certainity

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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26 July 2010 As far as unabsorbed depreciation is concerned, reasonable certainty is enough to recognize deferred tax asset. But in the case of unabsorbed business loss, virtual certainty is compulsory to recognize deferred tax asset.

srinath

srinath (Expert)
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26 July 2010 Para 17 of AS 22 says "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."

so i thnik virutal evidence is required even for unabsorbed depreciation

srinath

srinath (Expert)
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26 July 2010 Pl correct me if m wrong sir

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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26 July 2010 I stand corrected.

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