Adjustment of Carryforwarded Accumulated Loss

How can I adjust Profit & Loss A/c (Dr.) Balance after Carryforwarded of eight years in the Balance Sheet.

Please Reply giving journal entry.

Replies (2)

You neednot adjust

Income tax is not same as accounts. You will not eligible to take credit of losses aquired earlier i.e. before 8 years in accounts you have to carry it.

normally loss will be directly profit and loss account shows debit balance. how ever same loss directly allowed in the same year as per companies act where as as per income tax it will be allowed in 8 years so u have to adjust deferred tax accordingly.

this difference is called timing difference between companies act and income tax act.

 

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