deffered tax

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Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2010 What is deffered tax asset or liability? is it applicable in case of company suffering loss

sudhakar ca cwa

sudhakar ca cwa (Expert)
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16 September 2010 read AS-22
and it wil applicable for loss company also

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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16 September 2010 Little more details are given hereunder.
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.

shakuntala chhangani

shakuntala chhangani (Expert)
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26 September 2010 Hi, as per AS 22, in case of loss, DTA can be created only if there is virtual certainty that sufficient taxable income will be available in future against which DTA can be realised. (ASI 9)
Regards, CA Shakuntala Chhangani

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