0 (Based on Appendix 7B) Marshall Companies, Inc., holds a note receivable from a former subsidiary. Dueto financial difficulties, the former subsidiary has been unable to pay the previous year’s interest on the note.Marshall agreed to restructure the debt by both delaying and reducing remaining cash payments. The concessionsimpair the creditor’s investment in the receivable. How is this impairment recorded?

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.