Question: Ghorse - Dec 07

If you have liability, why do you DEBIT account? I think you should CREDIT DTL

Look at your suggestion of DR DTL and Dr DTA This can surely not be correct. The figures you have given - is this what you want to appear on the SoFP or are you trying to get rid of these balances? Too little information for anyone to be able to give you an answer

Deferred Tax liability DR 2.7 Deferred Tax Asset DR 4.5 Tax Expense CR 7.2

I'm sorry Peace - I really am! Your double entry above makes absolutely no sense whatsoever. I asked above, and you didn't answer - are you trying to eliminate these balances brought forward or are these the amounts which you wish to show on the SoFP? I need quite a bit more information if I am to be able to sort out your problem

But Christianp did mention which question it is? There was a change in government legislation and the tax authorities allowed revaluation of the non-current asset, so before revaluation there was a DTL and after revaluation there was a DTA.

Ah, ok Bring down on the credit side of the Deferred Tax account the amount of 2.7m Enter on the credit side of the same account the amount of 4.5m with the narrative of "Carried down" and enter 4.5m below the total lines on the Deferred Tax account on the debit side with the narrative "Brought down" Now balance off the Deferred Tax account by adding up the bigger side ( this time, it's the credit side ) and put the total amount in the credit side total line ( 7.2m ) Now put that same amount in the total line on the debit side Now put into the debit side the amount which is necessary to make the debit entries add up to that total which you have just put in. The missing entry is therefore 7.2m but it needs a narrative against it - you've just made a debit entry so where's the corresponding credit? The credit entry is in the Current Tax account and is therefore used in calculating this year's tax charge for the Statement of Income