Business Infographics on LinkedIn: Deferred Tax Assets vs. Deferred Tax Liabilities Credits to Nevena… (2024)

Business Infographics

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Deferred Tax Assets vs. Deferred Tax LiabilitiesCredits to Nevena Miskovic, follow her for more useful finance content.------Here's the original post:Differences between financial reporting and tax regulations can cause discrepancies in income recognition or expense recognition.When these discrepancies are expected to be resolved in the future in a way that reduces the taxable income of a company, a DTA can arise.DTAs are based on "temporary differences."Temporary differences are differences between the tax base of an asset or liability and its carrying amount in the financial statements that will result in taxable amounts or deductible amounts in the future.▶️ 𝗖𝗼𝗺𝗺𝗼𝗻 𝗖𝗮𝘂𝘀𝗲𝘀 𝗳𝗼𝗿 𝗗𝗲𝗳𝗲𝗿𝗿𝗲𝗱 𝗧𝗮𝘅 𝗔𝘀𝘀𝗲𝘁𝘀 𝗼𝗿 𝗟𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝗶𝗲𝘀:𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗟𝗼𝘀𝘀𝗲𝘀If a business has a loss for accounting purposes, it might not be fully utilized for tax purposes in that year. This loss might be carried forward to offset future taxable income.𝗗𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝗰𝗲𝘀 𝗶𝗻 𝗗𝗲𝗽𝗿𝗲𝗰𝗶𝗮𝘁𝗶𝗼𝗻Some jurisdictions allow for accelerated depreciation for tax purposes compared to accounting depreciation.𝗣𝗿𝗼𝘃𝗶𝘀𝗶𝗼𝗻𝘀 𝗮𝗻𝗱 𝗥𝗲𝘀𝗲𝗿𝘃𝗲𝘀A company might make provisions for bad debts or other future expenses in its financial statements. These provisions reduce accounting profit but might not be deductible for tax purposes until the expense is incurred.▶️ 𝗟𝗼𝗼𝗸 𝗮𝘁 𝘁𝗵𝗲 𝗺𝗮𝗶𝗻 𝗱𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝗰𝗲 𝗯𝗲𝘁𝘄𝗲𝗲𝗻 𝗗𝗧𝗔 𝗮𝗻𝗱 𝗗𝗧𝗟.-------🛎️ Want to develop your 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗺𝗼𝗱𝗲𝗹𝗶𝗻𝗴 𝘀𝗸𝗶𝗹𝗹𝘀?Start with Bojan and Nevena’s Masterclass: https://lnkd.in/ewVWf_5b𝗪𝗵𝗮𝘁 𝗶𝘀 𝗶𝗻?💠 6 Hours of video course sessions💠 35 lessons divided in 5 modules💠 10+ Languages video course subtitle💠 50+ finance modeling sheets, editable in Excel💠 330 pages of PDF finance modeling instructions💠 30+ Pieces of actionable content: visuals, handbooks.💠 Assumptions, accuracy validation and consistency checks💠 3 statements monthly and annually planning excel model💠 Advanced platform interface, tracking notes and progress-------Follow Business Infographics to learn from the best visuals.

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Bojan Radojicic

Finance Modeling Coach. Helping Finance Pros Make More Money with Impactful Finance Models & Trainings.

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What a tuff topic guys.

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Viktoria Danchuk, PLP

Integrated Accounting, Human Resources, and Payroll Solutions for Small- and Medium-sized Businesses | Project Resource Management | Payroll Leadership Professional

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Nicholas, thank you for sharing it. - This is one of the most straightforward summaries of such a complex topic! Well done, Nevena!

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Mayank Mehta

Having more than 10 years plus experience in purchase store

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Very useful to Account professional

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