What is Deferred Tax?
Deferred Tax A balance sheet account arising from temporary differences between the tax base of assets and liabilities and their carrying amounts in financial statements, resulting in deferred tax assets or liabilities as per IAS 12 and ASC 740.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Deferred Tax” Used in Practice?
Deferred tax liabilities arise when taxable income is lower in the current period due to timing differences, but will reverse in future periods.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Deferred Tax?
A balance sheet account arising from temporary differences between the tax base of assets and liabilities and their carrying amounts in financial statements, resulting in deferred tax assets or liabilities as per IAS 12 and ASC 740.
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