01 September 2008
What is the difference between deferred tax asset and deferred tax liability. Can any one tell me how to calculate deferred tax liability and how to create a provision for deferred tax in the financial statements.
02 September 2008
If due to a provision of income tax law a tax concession is availed ahead of its normal allowance, (example accelerated depreciation), it means your tax liability is postponed. In this case deferred tax liability would arise. Similarly if the tax allowance is post poned (example allowance of preliminary expenses in 10 instalment although incurred upfront), it means you have paid tax ahead. In this case deferred tax asset will result.
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