Deferred tax asset
radha (nil) (198 Points)
13 October 2012
How past losses treated as deferred tax asset..can someone explain the concept pls..
2 Replies
Sunil Kumar Gaur
(Accounting & Taxation Indian and Australian)
(273 Points)
Replied 14 October 2012
The whole AS 22 is based on the concept that Income tax be pe provided for on accrual/mercantile basis. The tax on income which is not payable now but later has to be considered as deferred tax liability.
For Current losses you are going to get benifit in coming years as business loss will be set off against profits in future. That is why losses result into deferred tax asset. Hope it is clear.
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