deferred tax

Also, sir, deferred tax assets and deferred tax liabilities usually will be Non current or current?

@arunotes said: may i knw what is the reason behind when the carrying amt of liabilities more than tax base, it will be deferred tax assets? thankss

Hi, If the carrying amount is greater than the tax base then we have a deferred tax liability and not a deferred tax asset, as you say. It will be a deferred tax liability as the tax base is lower due to the company claiming more capital allowances than depreciation charged. There will therefore be less capital allowances available in the future if we have claimed this amount of capital allowances already, and so we would therefore pay more tax in future as we get less of a deduction against taxable profits. Thanks

@arunotes said: Also, sir, deferred tax assets and deferred tax liabilities usually will be Non current or current?

Yes, they usually will be. Thanks

I am referring to liabilitiy item rather than asset item such as warranty expense

usually will be Non-current OR current??? how to identify the deferred tax asset/liability is current OR non-current? Thanks

@arunotes said: usually will be Non-current OR current??? how to identify the deferred tax asset/liability is current OR non-current? Thanks

It would depend on when it is settled.

@arunotes said: I am referring to liabilitiy item rather than asset item such as warranty expense

You would be saving tax in the future when the deduction is allowed, hence the deferred tax asset.