Which of the following disclosures is required for a change from sum-of-the-years-digits to straight-line depreciation method?   Question 56 options: a Recomputation of current and future years' depreciation b Restatement of prior years' income statements c The cumulative effect on prior years, net of tax, in the current retained earnings statement d All of these are required.

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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.