AS-22

Originally posted by : nikita
	1) As per AS-22 one of the condition for setting of DTA and DTL is enterprise has a legally enforceable right to set-off  the recognized amounts. In this context what do we mean by LEGAL ENFORCEABLE RIGHT   ?????   2)This accounting standard uses words current tax assets and current tax liability  Does it mean by advance tax paid (current tax asset) and provision for tax (current tax liability)  ????   3) Please clarify about reasonable certainty and virtual certainty ????   Please reply only those who have proper knowledge of this accounting standard.

 see legally enforceable right means a right which is enforceable and protected by law

Also there is no such word as crrent tax asset . AS has used the word deffered tax asset and liability

Hi!

Current Tax Assets means the 'Tax payable as per Tax Laws for the reporting period'.

Mr. ankit read AS-22 first and than answer. Thats why i written reply only when you have proper knowledge. And i dont want defination of legal enforceable law i want its example....... 

Hi!

Some rechnical problem occured to I could post only part earlier.

Now, when we prepare Balance Sheet at the end of reporting period we make provision for current tax i.e. tax payable as per tax laws for current year.

And whatever tax is paid as advance tax during the year is debited to a seperate a/c like 'Advance Tax' a/c.

Now the question while drafting final balance sheet shall amount of 'advance tax' shall be shown as 'Current Assets' & provision as 'Current Liabilities'. So the AS-22 clarifies in this regarding as if there is enforceable right the set off both a/c other wise show seperately.

reasonable certainty --> 
there is probability like history of high earning.

virtual certainty -->
 with some convincing evidence.

With Regards,

Kunal Agrawal

Originally posted by : Kunal Agrawal
	Hi! Current Tax Assets means the 'Tax payable as per Tax Laws for the reporting period'.

 tax payable as per tax law is cuerrent tax and not current tax assets.

miss nikita the AS has used the word current tax and not current tax asset, and current tax means tax for current year which is payable.

there is a link for you to the AS-22.Please ask the questions only if u have read the stuff...

https://www.archimedestechlaw.com/Updates/AS/AS22.pdf

Enforceable right means right that is given by A legal authority and enforeable without any compromise.

Some people may argue that credit of Advance Tax will be available only at the time of assessment and not before that. So in Income Tax Act, 1961 a section has been inserted to grant credit of Advance Tax to the assessee. See section 219 of Income Tax Act, 1961

With Regards,

Kunal Agrawal

Originally posted by : nikita
	Originally posted by : Kunal Agrawal Hi! Current Tax Assets means the 'Tax payable as per Tax Laws for the reporting period'.  tax payable as per tax law is cuerrent tax and not current tax assets.

Criteria for both taxes i.e. Current taxes & Deferred taxes has been given in AS-22

As fas as I think current tax is related to Advance Tax as seperate conditions has been given for setting off of DTA & DTL.

you may refer q.no. 1(a) of Audit paper of CA-Final (new course) may 2010 attempt

for your reference i have attached file here

No doubt bare AS-22 does not contain exact word 'Current Tax Assets' but same has been used in many books for referencing various pronouncements issued by ICAI.