Explain to a non-accountant the difference between the “income statement view” and the “balance sheet view” of deferred tax.

      

Explain to a non-accountant the difference between the “income statement view” and the “balance sheet view” of deferred tax.

  

Answers


Martin
When the income statement view of deferred tax is taken, there is a focus on the difference between the accounting profit and the taxable profit. This was the view of differed tax taken internationally and in the UK and US until the 1990s. The balance sheet view focuses on the difference between the carrying amount of assets and liabilities and their amount in tax terms and forms the basis of current IAS and US GAAP
UK GAAP still focuses on the statements. In some situations, it makes no difference whether we take an income or balance sheet view but in many, it does.
marto answered the question on February 14, 2019 at 06:39


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