Deferred tax assets: the nature and main principles of accounting
The essence of deferred tax assets
Deferred tax assets are represented by some temporary differences, which may form a certain positive result of activities, but in the reporting period there is no payment to the budget from it.However, these obligations can only be paid in the next reporting period. Also, the following temporary differences may be included in deferred tax assets:
- arising due to different methods of depreciation within the tax (large value) and accounting (lower value) of accounting;
- from the proceeds received after the sale of finished products or goods, as well as the work and services provided, in the form of income from the main activity. This also can be attributed, and taking into account the interest income on accounting, on the basis of certainty in the time interval of the actual implementation of the activities of a business entity.In this case, for tax purposes, the cash method is used;
- postponement or installment payment of profits;
- arising from the inclusion of interest paid by organizations on loans and loans granted to them, deferred tax assets are displayed with the addition of non-operating expenses;
- arising from the accrual of interest on loans issued monthly, with a one-time repayment by the debtor.
Display deferred tax assets in accounting
Due to the fact that the financial statements are formed separately from their “colleague,” deferred tax assets can most likely be presented as underpayment of profits, but only as of a specific date, based on data from declarations for reporting periods and payments from profits in the form of advances. Therefore, this situation often takes the following form: a tax that is calculated on accounting, exceeds the value of its counterpart, calculated in another form of accounting. The deferred tax asset is reflected in accordance with a specific accounting statement. For example, in the correspondence of such accounts: the credit of the account “Deferred tax liabilities” with the simultaneous display in the debit of the account “Calculations for taxes and fees”.Accounting for deferred tax assets is carried out in accounting in the amount that is determined in the form of the product of temporary differences that appeared in the reporting period and the payment rate applied in the reporting period.
Principle of learningthat
Most often, this type of assets arises from business entities that use the cash method in tax accounting. In this case, such deferred assets arise in income and expenditure. As an example, the following operation can be given. The goods are actually shipped, but the money from the buyer is “still on the way”. Therefore, according to accounting, revenue is already there, but not tax accounting.