Differences between pretax accounting income and taxable income were as follows during 2021:     ($ in millions) Pretax accounting income   $ 360     Permanent difference     (30 )         330     Temporary difference     (22 )   Taxable income   $ 308         The cumulative temporary difference as of the end of 2021 is $64 million (also the future taxable amount). The enacted tax rate is 25%. What is the deferred tax asset or liability to be reported in the balance sheet?

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A:

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A:

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A:

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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.