Deferred tax assets are recognized for the future tax benefits of temporary differences.
What are Deferred tax assets?
- On a company's balance sheet, a deferred tax asset is something that lowers future taxable revenue.
- An item on the balance sheet that results from an overpayment or an advance payment of taxes is known as a deferred tax asset.
- A deferred tax liability, which represents unpaid income taxes, is the opposite of this.
- When there are discrepancies between tax laws and accounting principles or when there is a carryover of tax losses, a deferred tax asset may arise.
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