As-22

In the next year, you need to adjust them based on the temporary differences arising in that year and on the basis of tax rates applicable for next year.

thank u sir 

but what is the treatment for the  DTL created in the first year and in the second year if DTA is created 

DTL will be reversed to the income statement and from there DTA will be created.

U MEAN to say that the DTL will be adjusted with DTA ??

yes....

thank u 

DTA or DTL created in any year goes on reducing and finally become NIL as it is only a timing difference. But due to a number similar events that occur through out the life of the company there is always a chance that the DTA or DTL will never close as it is a cycle.

yes as per AS 22  deferred tax asset can be adjusted from DTL provided that sufficient future taxable income available against which such DTA can be adjusted. however it will be determined by managment .