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What is Mean By Defered Tax, How To Calculate?
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Answer Posted / mohammed alfan (calicut)
Deferred tax assets represent taxes that have been paid (or
often the carryforward of losses) but which have not yet
flowed through the income statement. A deferred tax
liability represents tax payments that have appeared on the
income statement but not yet been paid. They usually arise
when accounting standards and tax authorities recognize the
timing of taxes due at different times. For example, when a
company uses accelerated depreciation when reporting to the
tax authority (to increase expense and lower tax payments
in the early years) but uses the straight-line method on
the financial statements.
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