Interested to Buy Any Domain ? << Click Here >> for more details...
What is Deferred tax??
- 2 Answers
- 8965 Views
- QX Limited, I also Faced
- E-Mail Answers
Answers were Sorted based on User's Feedback
Answer / barodianbuddy(acca)
deferred tax arises because accounting profit will not be equal to taxable profit. The reason can be split into 2 categories:
1. permanent difference:- items that would have been used in calculating accounting profit but would not be used in calculating taxable profit. eg entertaining expenses (UK tax)
2. TEMPORARY DIFFERENCE:- Items that would have been used in calculating accounting profit and taxable profit but in different accounting periods. eg depreciation/tax allowances.
IAS 12 considers only the temporary differences.
| Is This Answer Correct ? | 4 Yes | 3 No |
Answer / jejeswara reddy
The need for deferred tax accounting arises because companies often postpone or pre-pays taxes on profits pertaining to a particular period.
1.deferred tax Liability
2.deferred tax asset
1.deferred tax Liability: There may be a difference in the way certain items of expense are allowed to be treated for tax purposes and how a company actually treats them.
Tax laws allow full depreciation in the first year after a company acquires certain assets. However a company may actually write off the depreciation over several years on its financial statements. The company may charge depreciation at lower rates than allowed under tax laws. Or it may use a different method of charging depreciation.
2.deferred tax asset: The tax laws may not recognize some of the expenses that a company has accounted for in its accounts. For instance, provisions made at the discretion of the management, such as those for bad debts, which are not fully recognized by tax authorities.
In such cases, a company is actually pre-paying taxes pertaining to future years. For the year, the profits that the taxman calculates would be higher than those computed by the company. Therefore a company would save on tax in the years when the expenses or provisions actually materialize.
Adjusting for a deferred tax asset :
There are two classifications for a deferred tax asset:
1. Expense:
a. Is a bonifide GAAP expense today
b. It is not a tax deduction today
Is NOT subtracted from the cash flow calculation
2. Revenue
a. Not a bonifide GAAP expense today
b. It is however taxable income.
Subtracted from the cash flow calculation
| Is This Answer Correct ? | 0 Yes | 0 No |
what is differed tax liability/asset? how it is to be calculated?
What is the general entry for TDS certificate received from the debtor of the company?
define double entry bookkeeping
scrap material value 5000/- vat rate is 5%+tcs. now my question is 1.how much value of tcs & vat. 2.after taxable value add vat or add tcs (before vat or tcs) & how much value of vat & tcs. Plz reply me
what the meaning of tax
can anybody tell me what is the last date of Service tax payment (Quarterly/Monthly) in Company or other then company (individual/propritorship/partnership) & what is the last date of half year return.
What is deferred tax?
Daily announced price of Gold. this price is included vat ya without vat. pls give me solution.
Please anybody tell what is a entry for Sales Tax & Income Tax refund received.
Please tell me the rate of service tax of Transportation and the who is liable to deposit the Service Tax, the receiver of service or provider the service
is there any necessity to file TDS to purchase a thing even ater paying vat
Is Govt staff also paying taxes in India
Audit 
