Interpretation of AS-22

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Rishabh Mishra (Querist)

15 August 2008 i have doubts in my mind regarding the interpretations of AS-22...firstly...when accounting income is more than taxable income..we create a DTL...why we call it a liability and why we create it due to a timing difference...secondly regarding passing of entry in books of accounts(P/L Dr. To DTL)..why we affect our P/L a/c in the year in which timing difference arises...and why we reverse DtL in subsequent periods....(means how the overall process of creation and reversal is helping in bringing out the true and fair view of B/S and P/L a/c)...please explain me the concept by giving an example....i will be very grateful....send me reply on rishabh_mishra35@yahoo.com

Miss Komal Mantri

Miss Komal Mantri (Expert)

16 August 2008 Its our liability as taxable income is less than a/c Income that means v hav paid less tax and will hav to pay tax for this difference in future..

reason behind ur question
"secondly regarding passing of entry in books of accounts(P/L Dr. To DTL).."
is matching concept..

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