Defeered tax Liability

Dear Sir,

First of all DTA/DTL is created as per AS 22 & not as per AS 21..

Anyways, It will not be treated as part of Reserve & Surplus since ICAI has prescribed it's disclosure "After/Below Loans on Liabilities Side" 

 

 agree with Mr. Amir

Dear Mr Amir, As you replied that the same is not treated as part of Reserves & Surplus as per ICAI Guidelines.But can you clarify me when the deffered tax liability created at time of transtional period when As-22 was applicable the same was out of either cr balance in Profit & Loss A/c or General reserve which is part of Reserves & Surplus. Please comments. regards Ca Sanjay Baheti,Ahmedabad

Dear Sanjay,

Tell me Deferred Tax liability is an expense or an appropriation ??

It is an expense, it is only for Transitional period it is created from the opening balance of P/L a/c or General Reserve.

Ok if I go by ur logic that Every item which is created from balance of P/L A/c or General reserve is a"Reserve & surplus",

then what u have to say about Dividend, is it also "Reserve & Surplus"... No my friend Dividend is a liability...

Similarly "Deferred Tax Liability is not a part of Reserve & surplus"

Sir, I also wnat to know that can we ni the Balance of Daffered tax whcih we have created at the time of Balance sheet finalising Thanks Munish K.Bhanot

The Principle of Accounting of Deferred tax is Accrual Concept.

 

Hence it is either a libility or an asset.

 

So it is clear that it is not a part of Reserves and Surplus.

 

Deferred Tax is the timing difference.

 

The concept of Deferred Tax is based on the assumption that at one point of time the difference between Book Profits and Profits under IT Act is set off (becomes NIL).

 

But practically it will not be so. Because when business is run; every year there are  so many transactions which will create timing difference every year.

Yes I agree with CA Surendra Kumar Rakhecha.. As DTA /DTL is the provision of  timing difference of book profits Or Profit as per Companies act and profits under IT Act.. So it should not be considered as the part of Reserves & Surplus and thus requires a separate disclosure in the face of Balance Sheet and Also  a comment in the Notes on Accounts...

With Thanks & regards

Rohit..

 

 

KA Mr. Sanjay Baheti

Fresh TIN registration both for Vat/CST under VAT/CST ACT - VAT

You cannot avail the benefit of LUMPSUM under Gujarat VAT Act & it also not permits to purchase from o/s Gujarat hence, you have to go in regular scheme ok

NILESH H GAJJAR

9825114973

@ amir: btw u knw..propoed dividend will be consired as reseres and surplus once IFRS comes into practice