In the previous year we incurred loss of Rs.305000 and DTL created (for depreciation difference) Rs.80767 our auditor has forgotten to create DTA on loss incurred or he might have beleived no convincing evidence for earning profits future so as to create DTA at that time. Now in the present year we got enough profits to set off previous year whole loss, now pls suggest what is course of action to be taken now: should we need to make any changes or adjustments to our financials?should the auditor who has prepared PY accounts be blamed because he hasnt even given any note in FS that he dont foresee any profits future?answer me this way as well: ex: supposing we havnt got sufficient profits this year as well what would be the course of action?should we create DTA on loss carried forward (assumption: good profits in future)
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Deferred tax
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you have to look for what is profit according to books of accounts also with out giving adjustments of income tax act if it is still a loss in first year u mentioned then there is no problem as there is loss in both the records that is income tax purpose and books of accounts , but if there is profit according to books of accounts and there is loss due to income tax act adjustments and it is probable that you willl have good profits in future then you can start creating deffered tax asset now also
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