Deferred Tax Asset or Liability

WDV as per IT = 100
WDV as per Co. act= 140

What will be the result is it Asset or Liability?
Replies (6)
Quick Summary
This discussion clarifies whether a difference in Written Down Value (WDV) between Income Tax (IT) and Company Act calculations results in a deferred tax asset or liability. It explains that a higher WDV under the Company Act leads to a deferred tax liability. The conversation also touches on calculating the movement in deferred tax by comparing current and previous year provisions, and how to account for positive or negative balances in the Statement of Profit or Loss Other Comprehensive Income (SPLOCI).

Liability

Deferred Tax Liability

Thanks.

40*tax rate= liability. If you have a deferred tax provision brought forward from previous year, you need to calculate the moment in deferred tax

What moment you need to calculate.

No electricity and I had to tether my mobile. 

@ Sabyasachi Hi Deferred tax moment. You have to subtract current year deferred tax with previous years credit to deferred tax provision. If the balance is positive debit it. If the balance is negative, credit it to SPLOCI only. I have attached a deferred tax schedule for your convenience. I got this for exam and I got it right. But only recently Ive learnt about debiting the positive moment to SPLOCI and crediting negative moment to SPLOCI. 

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register