in our books we have Deffered tax assets as per AS-22 . I want to know how to show this figure In balance sheet and under which group it will come and also let me know that is it will part of net current assets?
14 Replies
CA Bada Sanjay Kumar Reddy
(CA)
(69 Points)
Replied 19 November 2011
It will not form part of current assets and it is seperate line item in the balance sheet and it is to be disclosed seperately. Deffred Tax Asset being more liquid than Fixed Assets and Investments and less compared to current asstes. It is appropriate to show after Fixed Assets and Investments and before Net Current Assets
Pankaj Arora
(Learner)
(3134 Points)
Replied 19 November 2011
Thanks could you also tell me how it will set off from our balance sheet ?
ashish gupta
( student)
(1922 Points)
Replied 19 November 2011
When your taxable income will be less than the Accounting income, then DTA will be reversed
CA Bada Sanjay Kumar Reddy
(CA)
(69 Points)
Replied 19 November 2011
Deffered Tax Asset/ Liabilty depends on timing difference. At the year end we get either deferred tax Asset/ Liabilty which is to be disclosed in the balance sheet. Once verify the calculation part of deferrered tax which arises between taxable income and accounting inncome.
Pankaj Arora
(Learner)
(3134 Points)
Replied 19 November 2011
Ok but if we have DTL than it will have to show under current taxation in P & L A/c.?
Pankaj Arora
(Learner)
(3134 Points)
Replied 19 November 2011
Is it application to all companies private or public limited. If our company is not showing dta/dtl than is it there any penalty ?
Pankaj Arora
(Learner)
(3134 Points)
Replied 19 November 2011
Is it application to all companies private or public limited. If our company is not showing dta/dtl than is it there any penalty ?
ashish gupta
( student)
(1922 Points)
Replied 19 November 2011
Yes its applicable to all companies. This is the requirement of law to follow the accouting standards in preparation of the financial statements. So it becomes the duty of the auditor to highlight the fact in the audit report.
YEs DTL will be added in current tax
Pankaj Arora
(Learner)
(3134 Points)
Replied 19 November 2011
Our co. is private limited company and we charge depreciation as per IT act and not as per co. act. That’s why we did not created DTA/DTL in our books and neither auditor check it so what shall we do?
CA Bada Sanjay Kumar Reddy
(CA)
(69 Points)
Replied 19 November 2011
Deferred Tax arises not only with respect to Depreciation but also it covers various timing differences between taxable income and accounting income. But in your case if there are no other timing differences
then there will be no concept of deferred tax because the depreciation as per IT act and Companies act are one and the same in your books of accounts.
Pankaj Arora
(Learner)
(3134 Points)
Replied 19 November 2011
But sir we charged deprecation on computer as per IT act 60 % and as per co. act is 40 % w.d.v. that means we should create DTL. Am I right ?
CA Bada Sanjay Kumar Reddy
(CA)
(69 Points)
Replied 19 November 2011
But you said in the earlier discussion that depreciation as per IT Act and Companies Act what you adopted is one and the same. But in your case rate @ 40 and 60 will atract defferred tax. But you make sure that it is the minimum rate of dep. what Companies act says. But you are always welcome to chrage dep @ 60 as per Companies act also.
Pankaj Arora
(Learner)
(3134 Points)
Replied 19 November 2011
That means we don’t need to create DTL?
CA GOVIND KRISHNA AGARWAL
(CA)
(202 Points)
Replied 22 November 2011
See As per the Companies Act, Rates specified in Schedule XIV is the minimum rates of depreciation for the purpose of payment of dividends and computation of managerial remuneration, respectively .The Companies (Amendment) Act, 1988, has amended section 350, as a consequence to which rates of depreciation prescribed in Income-tax Act, 1961, and the Rules made thereunder are no more relevant as the aforesaid section now provides that the rates of depreciation applicable would be those prescribed in Schedule XIV, which has been inserted in the Act.
But Part II of Schedule VI further provides that if no provision for depreciation is made, the fact that no provision has been made shall be stated and the quantum of arrears of depreciation computed in accordance with Section 205(2) of the Act shall be disclosed by way of a note.
So. In this case there is no voilation of AS-22 Because there is no difference between Taxable income and accouninting income but the auditor should notify in his audit report the method of depreciation and short provision of depreciation if any in his audit report.
Also if Dividend has been declared by the company then another various provision should be follow.... as per companies act.
Recent Topics
- Need your valueble insight.
- Softex For freelancer ?
- GST ON REIUMBURSEMENT ENTRY ON GST PORTAL
- Missing invoice in gst
- GST on consultancy
- Linking adhaar to UAN without employer
- WHETHER ITC REVERSAL TH. GSTR 3B OR DRC03
- Advance Tax For Freelancers
- Is fvu 8.8 version available ?
- Interest and penalty on advance tax shortfall
Related Threads
CAclubindia
