Accounting for Deferred Taxes

Abstract

This note defines the concept of deferred tax arising from timing differences between the accounting income and tax income. It gives detailed procedures for computation of deferred tax under various situations along with journal entries and provides details of presentation of deferred tax liability or asset in the financial statements. It compares significant differences between the Indian GAAP, US GAAP and the International Accounting related to tax expenses to the users of the financial statements.