For reporting purposes, current deferred tax assets and current deferred tax liabilities for the same company and tax jurisdiction are: Combined with noncurrent deferred tax assets and noncurrent deferred tax liabilities in the balance sheet to show a single net noncurrent amount. Netted against one another and shown as a net current asset or liability in the balance sheet. Reflected only in the notes to the financial statements. Reported separately in the balance sheet.

For reporting purposes, current deferred tax assets and current deferred tax liabilities for the same company and tax jurisdiction are: Combined with noncurrent deferred tax assets and noncurrent deferred tax liabilities in the balance sheet to show a single net noncurrent amount. Netted against one another and shown as a net current asset or liability in the balance sheet. Reflected only in the notes to the financial statements. Reported separately in the balance sheet.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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.

Question

For reporting purposes, current deferred tax assets and current deferred tax liabilities for the same company and tax jurisdiction are:
Combined with noncurrent deferred tax assets and noncurrent deferred tax liabilities in the balance sheet to show a single net noncurrent amount.
Netted against one another and shown as a net current asset or liability in the balance sheet.
Reflected only in the notes to the financial statements.
Reported separately in the balance sheet.

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