At the beginning of 2019, PT XYZ purchased an asset for Rp600.000 with an estimated useful life of 5 years and an estimated residual value of Rp50.000. For financial reporting purposes the asset is being depreciated using the straight-line method; for tax purposes the double-declining-balance method is being used. ABC’s tax rate is 40% for 2019 and all future years. At the end of 2019, which of the following deferred tax accounts and balances is reported on ABC’s statement of financial position?

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A:

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Q: Uramilaben

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.