The benefit of future deductible amounts can be achieved only if future income is sufficient to take advantage of the deferred deductions. For that reason, not all deferred tax assets will ultimately be realized. How is this possibility reflected in the way we recognize deferred tax assets?

Q: Explain how a change in tax rates affects the measurement of deferred tax amounts.

A: Deferred Tax Asset Items on a company's balance sheet that may be used to reduce taxable income in…

Q: Which of the following is an example of a temporary difference which would result in a deferred tax…

A: Solution: Rent revenue collected in advance included in taxable income before it is included in…

Q: Question 1: Why do deferred tax assets or deferred tax liabilities arise? Explain your answer with…

A: Taxation is defined as the tax liability to be paid to the government on the income for a particular…

Q: What is an ‘exempt income’ and how does it affect the calculation or recovery of carry‐forward tax…

A: Any earning that is not subject to taxation is referred to as exempt income. Exempt income laws and…

Q: Access the glossary (“Master Glossary”) to answer the following. a.    What is a deferred tax asset?…

A:

Q: Which of the following is the most likely item to result in a deferred tax asset?

A: Unearned revenue is the most likely item to result in a deferred tax asset.  Unearned revenue means…

Q: Provide two examples of expenditures that are typically not allowable for tax deductions but are…

A: Introduction: A tax-deductible cost is one that is "ordinary, essential, and reasonable" and…

Q: What is meant by “tax allocation within a period”? What is the justification for such practice?

A: Tax: Tax refers to a compulsory payment or a contribution to the state revenue, levied by the…

Q: Where the carrying amount of an asset or liability is different from the tax base a ‘temporary…

A: Temporary difference is occurre in one period and shall be reverse in subsequent period for tax…

Q: The tax law requires that capital gains and losses be separated from other types of gains and…

A: Short-term capital lose are allowed to be setoff against both long-term gain and short-term…

Q: TRUE OR FALSE? Under IFRS, deferred tax liability and deferred tax asset should be reported as…

A: The given statement is True... Under IFRS, deferred tax liability and deferred tax asset should be…

Q: Explain the Revenue Related to Deferred Tax Liabilities.

A: Deferred tax liability is explicitly made when an expense commitment gathered in one budgetary year…

Q: If the increase in deferred tax asset is ____ than the increase in deferred tax liability, there is…

A: If the increase in deferred tax asset is Higher than the increase in deferred tax liability, there…

Q: When DTA reverses, income tax payable is reduced, while when DTL reverses, income tax payable is…

A: Temporary differences are differences between book income and taxable income of the business. These…

Q: Define tax loss carryback and carryforward

A: Tax or Taxes: Tax is an amount paid by the persons (individuals and business entities) to a…

Q: he deferred tax consequence attributable to a deductible temporary difference and operating loss…

A: Solution: Deferred tax assets are created from those temporary differences which are future…

Q: All are true except: OSD is a substitute for itemized deduction. The OSD relieves the taxpayer of…

A: In lieu of the itemised deduction of ordinary and necessary expenses paid or incurred to calculate…

Q: A temporary difference which would result in a deferred tax liability is O excess of tax…

A: Introduction:- A deferred tax liability represents an obligation to pay taxes in the future.…

Q: Which of the following is NOT a reason why timing is significant in tax? Group of answer choices…

A: Tax: When any assesse is earned the income from any sources of income which are mentioned in the tax…

Q: Deferred tax liabilities should be treated as equity when:A . they are not expected to reverse.B .…

A: Deferred tax liability: Deferred tax liability is a tax that is measured or is outstanding for the…

Q: If you are a tax adviser, would you advise to claim the deduction in full amount or be capitalized…

A: Claim of deduction in form of Capitalized and Depreciation If an entity opt for the deduction of…

Q: A deferred tax liability (or asset) is described as the tax effect of the temporary difference…

A: A deferred tax adjustment is prevalent where there is a temporary difference in the book value and…

Q: Which of the following is not a source of support for the occurrence of a deferred tax liability?…

A: Solution: Future deductible temporary differences is not a source of support for the occurrence of a…

Q: Which of the following statements is correct? O a. A tax offset can result in a refund if it relates…

A: The tax means the amount that a taxpayer provides to the government. The government uses this amount…

Q: TRUE OR FALSE? If the carrying amount of a liability is higher than the tax base, the difference is…

A: The given statement is True...If the carrying amount of a liability is higher than the tax base, the…

Q: If the carrying amount of an asset is higher than the tax base, the difference will result in…

A:

Q: Under what condition deferred tax assets can be offset against deferred tax liabilities

A: SOLUTION- DEFERRED TAX ASSETS- IT IS AN ITEM ON THE BALANCE SHEET THAT RESULT FROM OVER PAYMENT OR…

Q: A temporary difference that would not result in a deferred tax asset but not a permanent difference?…

A: Solution: A temporary difference that would not result in a deferred tax asset but not a permanent…

Q: Explain why permanent differences have no deferred tax consequences.

A: A permanent difference is a business transaction that is reported differently for financial and tax…

Q: Temporary differences result in future taxable or deductible amounts when the related asset or…

A: Permanent difference refers to those differences that are caused by transactions and events that…

Q: Briefly explain how tax loss carryback and carryforward procedureswork.

A: Loss carryback is a situation in which business is having operating loss in this year and it want to…

Q: List examples of temporary differences that create: deferred tax assets deferred tax liabilities.

A: Temporary difference between the tax base and carrying amount arise on account of difference in the…

Q: A temporary difference that would not result in a deferred tax asset but not a permanent difference?…

A: Solution: A temporary difference that would not result in a deferred tax asset but not a permanent…

Q: Why do deferred tax assets or deferred tax liabilities arise? Explain your answer with suitable…

A: The percentage of tax on the difference in the amount of accounting and taxable income is termed…

Q: TRUE OR FALSE? 1. An excess tax depreciation will result to a deferred tax liability. 2. If the…

A: 1.An excess tax depreciation will result to a deferred tax liability-The given statement is False..…

Q: what are the main objectives of the deferred tax asset approach?

A: Items on a company's balance sheet that may be used to reduce taxable income in the future are…

Q: How might a reduction in future tax rates affect deferred tax assets in a way that reduces current…

A:

Q: The "income tax benefit" account reduces the current tax expense for the year and is a deduction…

A: Income tax: It implies to a financial levy that is imposed or charged on the taxable income of the…

Q: Which of the following is not a source of support for the realization of a deferred tax asset?…

A: Future expiration of temporary exemptions is not a source of support for the realization of a…

Q: Under what conditions can deferred tax assets be offset against deferred tax liabilities?

A: Deferred tax assets (DTA) is stated under the head of non- current assets whereas deferred tax…

Q: According to PAS 12, this do not give rise to deferred tax asset or liability because they have no…

A: PAS 12 provides provisions relating to Accounting for Income taxes.

Q: If the current tax expense is greater than the total income tax expense during the period, there…

A: Total income tax expense is the expense which are payable by the taxpayer which has not been…

Q: A net operating loss (NOL) carryforward creates: A-a deferred tax liability that should be…

A: Net operating loss is the excess amount of allowable deductions over the taxable income. When the…

Q: Explain two main reasons why expenses may not be deductible for income  tax/corporation tax purposes

A: Deductible expenses: These include all the expenses that are allowed to be deducted from the gross…

Q: Why do deferred tax assets arise? Explain your answer with suitable example.

A: Item on an organization's monetary record that might be utilized to diminish tax for later are…

Q: In the case of property tax, government costs are low but taxpayer cost are high

A: Property tax levy is imposed primarily on land and buildings and also imposed on business,farm…

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.