Hi friends
I want to know that when provisions are created, the entry is
P&L Dr.
To Provisions
Therefore its a charge on profits and hence results in tax saving also to that extent.
Suppose in later years, the provisions have to be released, the above entry will have to be reversed. Does that mean that in the year of release, the said amount will become taxable?
Regards
Sumit
I want to know that when provisions are created, the entry is
P&L Dr.
To Provisions
Therefore its a charge on profits and hence results in tax saving also to that extent.
Suppose in later years, the provisions have to be released, the above entry will have to be reversed. Does that mean that in the year of release, the said amount will become taxable?
Regards
Sumit
CAclubindia
