Deffer Tax

What is deffer tax, asset & liability ?

How to set iff deffer asset & deffer liability?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Replies (2)

deffer is diffrance of  fixed aseets  through income tax low and company low.

than deffer is assets nothing liabilites

Tax paid is calculated as per taxation provisions applicable to a specific entity.. while Accounting income is calculated according to AS issued... Thus There may be a difference in taxable and accounting income... In order to show true and fair view in financial Statements a concept known as Deffered Tax Assets/ Liabilties as evolved..

In simple language, If u are paying higher tax today due to a method in tax laws which is computing higher income today compared with future, then a part of tax paid today shall not be charged to P&L and will be treated as Deffered Tax Asset untill the effect of that different method of tax method is nullified...

For more details refer to AS 22, Accounting for Taxes

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