Reversal of Deferred Tax??

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Dhanraj

Dhanraj (Querist)
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01 December 2009 Dear experts

Could you please explain in simple words what is reversal of DTA/DTL?

Thank you

shakuntala chhangani

shakuntala chhangani (Expert)
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02 December 2009 Hi Dhanraj, timing differences originate in one year and are capable of reversal in subsequent year/s. for these timing differences we create DTA/DTL. the year in which timing differences relating to particular item reverse, we close DTA/DTL A/c related to that paricular item by reversing DTA/DTL. Regards, CA Shakuntala Chhangani

Kishanlal Paliwal

Kishanlal Paliwal (Expert)
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02 December 2009 Hi Dhanraj,

Agreed with Shakuntala and thanks for the same.

To be more specific, it is not called as reversal rather it is adjustement, the entries in subsequent years will automatically knock-off the opening balance till the year upto which nullified.

Regards

Regards

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