Recognition, Measurement, and Presentation of Deferred Tax as per Ind AS 12
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- Last Updated on 26 April, 2022
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Deferred tax liabilities are the amounts of income taxes payable in future periods in respect of taxable temporary differences. Deferred tax assets are the amounts of income taxes recoverable in future periods in respect of deductible temporary differences, the carry forward of unused tax losses, and the carry forward of unused tax credits.
The following steps are to be followed in the recognition, measurement, and presentation of Deferred Tax Liabilities or Assets:
1. Computation of the carrying amounts of assets & liabilities in the books of accounts
2. Computation of tax base
3. Computation of temporary differences
4. Classification of temporary differences into Taxable temporary difference or Deductible temporary difference
5. Identification of Exceptions
6. Assessment of deductible temporary differences, tax losses, and tax credits
7. Determination of tax rate
8. Calculation and recognition of deferred tax
9. Accounting of deferred tax
10. Offsetting of deferred tax liabilities and deferred tax assets
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