Bablu Kumar Barnwal (Student) (34 Points)
20 November 2008How can I adjust Profit & Loss A/c (Dr.) Balance after Carryforwarded of eight years in the Balance Sheet.
Please Reply giving journal entry.
praveen
(Chartered Accountant)
(6971 Points)
Replied 20 November 2008
You neednot adjust
Income tax is not same as accounts. You will not eligible to take credit of losses aquired earlier i.e. before 8 years in accounts you have to carry it.
CA Durga Prasad Sigatapu
(CA CS executive programme student)
(151 Points)
Replied 20 November 2008
normally loss will be directly profit and loss account shows debit balance. how ever same loss directly allowed in the same year as per companies act where as as per income tax it will be allowed in 8 years so u have to adjust deferred tax accordingly.
this difference is called timing difference between companies act and income tax act.
CAclubindia
