Terms
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CA Saba Naaz
(Querist)
22 January 2011
Please explain me the meaning of the terms :
1.) Deferred Tax Asset
2.) Arm's Length Transaction
1.) Deferred Tax Asset
2.) Arm's Length Transaction
RAMESH KUMAR VERMA
(Expert)
22 January 2011
Deferred Tax Asset:-
An asset that is used to reduce the amount of tax that a company will have to pay in a later tax period. It is often associated with a loss carryover, and is used as a future write-off if the next tax period is expected to produce positive earnings. The asset is kept on the balance sheet. For example, a deferred tax asset of $100,000 from the previous year could be applied to before-tax income of $250,000 this year, resulting in taxable income of $150,000 ($250,000 - $100,000).
arm's length transaction:-
A transaction between two related or affiliated parties that is conducted as if they were unrelated, so that there is no question of a conflict of interest. Or sometimes, a transaction between two otherwise unrelated or affiliated parties.
Regards,
An asset that is used to reduce the amount of tax that a company will have to pay in a later tax period. It is often associated with a loss carryover, and is used as a future write-off if the next tax period is expected to produce positive earnings. The asset is kept on the balance sheet. For example, a deferred tax asset of $100,000 from the previous year could be applied to before-tax income of $250,000 this year, resulting in taxable income of $150,000 ($250,000 - $100,000).
arm's length transaction:-
A transaction between two related or affiliated parties that is conducted as if they were unrelated, so that there is no question of a conflict of interest. Or sometimes, a transaction between two otherwise unrelated or affiliated parties.
Regards,
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RAMESH KUMAR VERMA
(Expert)
24 January 2011
saba naaz,
thank-you. can also put up any queries in this forum eminent experts will assist you.
Regards,
thank-you. can also put up any queries in this forum eminent experts will assist you.
Regards,
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