In calculating the net assets of a target company, would deferred tax liability be a deduction from total assets of the company . In Bpp Text , a deduction from the asset of the target company was made for deferred tax liability. Can u please explain why a deduction , since in my view it does not require and actual payment as creditors.
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Deferred Tax Liability
12y ago#1Although there is no current liability, it will mean that there will be a future liability (for the actual tax to 'catch up' with the tax that has been charged in the accounts. So it is fair enough to subtract this from the net assets.
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