Income Tax Expert Question: Download Questions PDF
Please explain when Deferred Tax Asset & Deferred tax liability arises?
Answer:
Deferred tax asset arises when the expenses are recorded in the income statement before they are required to be recognized by the taxing authority. Also when revenue is being taxed before it is taxable in the income statement.
Deferred tax liability arises from different depreciation methods being used for tax as depreciable assets are reported as non current.
Deferred tax liability arises from different depreciation methods being used for tax as depreciable assets are reported as non current.
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