PBT is loss and PAT is gain

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 May 2010 Hi,

Here is a peculiar case, we have PBT as loss but on account of Defered tax credit we have PAT a profit, here my query is whether the auditor has to mention in the audit report in opinion para as loss for the year or profit for the year.

CA Kishore Tallam

CA Kishore Tallam (Expert)
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26 May 2010 Its not required for the auditor to mention that in the audit report. Actually speaking, the auditor wont comment whether the company has made any profit or loss during the period. He will comment that profit and loss account has been prepared as per GAAP.
Further, u need to check out if the company is making losses (assuming in previous years also) then how can we recognise deferred tax asset since there is no reasonable certainity for its realisation. kindly check this point also.