Get 3 Yrs of CCI Pro Membership at Greater Value. Subscribe Now!

Accounting standard-22

368 views

Save Share

PIYER

student

31 Points Posted on 04 December 2015

AS PER THE PARAGRAPH 15 OF THE AS-22 ,DTA SHOULD BE RECOGNISED ONLY IF THERE IS REASONABLE CERTAINTY THE FUTURE TAXABLE INCOME WILL BE AVAILABLE.

THE POINT WHICH REQUIRE CLARIFICATION IS IF THERE WILL BE FUTURE TAXABLE INCOME MORE DTA WILL BE CREATED AND NOT DTL TO REALISE THE DTA EARLIER CREATED,PLEASE CLARIFY THE SAME.

Replies (1)

CA Prateek Garg

CA in Practice

1113 Points Posted on 09 December 2015

The entire concept of DTA is based on accrual basis of accounting.

When we recognise DTA we are actually recognising the following fact

1. That there is an item of Expenses (Already recognised in Accounts / Will be allowed in Tax in future years) on which we will get tax benefit in future in the year of allowance OR

2. That there is an item of Income (Already recognised in Tax / Will be recognised in accounts in future years) on which tax already paid hence no tax will be required to be paid in future year, hence a tax benefit

However please note that in both of above case you will be able to realise these futurte benefits only if You have future income against which such future allowance can be adjusted.