Deferred tax

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Accounting - tax.

Deferred tax relates to the timing differences between accounts and tax.

Deferred tax reflects the future tax effects of transactions and events that have already been entered into at the balance sheet date.

A simple example of a deferred tax asset is a tax loss eligible for carry forward to shelter expected future taxable profits.

In this case, the expected future tax savings would be an asset/benefit recognised in the current balance sheet.

See also