Deferred Tax

Calculation

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Taxable loss to carried forward of 7k @ 18% = Def Tax Asset of 1.2k

Difference between NBV and TWDV is 8.8k more on the balance sheet @ 18% = Def Tax Liability of 1.6k

Does this therefore mean that DT must be provided in the account of 0.4k?

Replies (6)

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Accountants & Business Advisers
By Gladstone
09th Oct 2018 17:33

You have two different items giving rise to DT balances. As I understand your DTA is due to historical or current tax losses that you expect to recoup in the near future so you book an asset at £1.2k. However, your DTL is may be due to excess capital allowances claimed due to different treatment in accounting Vs tax treatment for assets. I would show the DTL separately and not net these and show only the net liability position. I'm aware that under US GAAP it is allowed to net off and show only the net position.

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Replying to Gladstone:
By johngroganjga
09th Oct 2018 19:59

I disagree. You show one deferred tax liability figure, which is £400,000.

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Replying to johngroganjga:
RLI
By lionofludesch
10th Oct 2018 08:56

johngroganjga wrote:

I disagree. You show one deferred tax liability figure, which is £400,000.

I vote the same as John.

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Replying to lionofludesch:
ALISK
By atleastisoundknowledgable...
10th Oct 2018 09:04

lionofludesch wrote:

johngroganjga wrote:

I disagree. You show one deferred tax liability figure, which is £400,000.

I vote the same as John.

I’ve seen both, but would probably consolidate, obvs with WPs showing the makeup.

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avatar
By Bobbo
10th Oct 2018 13:41

Why 18%?

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Replying to Bobbo:
RLI
By lionofludesch
10th Oct 2018 13:52

I took it to be a typo but good question.

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