26 November 2010
Dear Experts, For a company or a tax audit firm...if already there exists Deferred Tax Asset and Deferred Tax Liability and current year also there is some expenses (eg. Dep.rate ) please explain me how to comply with AS-22 requirement. Please answer me by giving me an example. Thanks & Regards, Rajesh.
28 November 2010
Suppose the firm is having opening DTA of Rs. 5000/-.
Now in the current year the depreciation as per income Tax is Rs. 1000 & as per companies Act is Rs. 2000 then for the current year there will be deferred tax asset for the current year.
Hence the overall deferred tax asset comes to Rs. 7000/- . You will need to pass the accounting entry for additional 2000/- in the current year. Attach DTA calcuations with the voucher.
DTA should be shown seperately in profit & loss account & balance sheet. The same should also been shown seperately in Notes on accounts.
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