What is a postponed tax asset?

Delayed tax asset is a balance sheet asset that can be used to reduce the future tax liability of the company. A postponed tax asset is essentially a tax advantage that the company delayed until the later tax period. For example, the company may have a loss that could reduce the tax liability by approximately $ 50,000. Instead of using this loss to reduce its current tax liability, it can use it to reduce its tax liability in the future tax period when the company has positive income.

In order to fully understand how tax deferred assets work, one can think well about the company's accounting and its tax liability independently. Expenditure is often deducted or projected for accounting purposes before the Company receives any tax relief for it. Companies find out whether they postponed tax claims by comparing their accounting income with their taxable income. If the taxable income of the company exceeds its accounting income, it may haveThe company deferred a tax asset. On the other hand, a company that has accounting income that exceeds its taxable income would have a different tax situation, which is referred to as delayed tax liability.

There are many ways to develop a deferred tax claim. They may develop, for example, when the company has net operating losses or financial changes due to restructuring. In some cases, the situation of deferred tax assets may even develop because of something, such as the product that the company sells. For example, the company can sell personal digital assistants (PDA) that come with warranties that last for several years; For each year the warranty pays, the company can expect warranty costs due to the returned PDA. When the Company submits its shareholders, this may include estimates of warranty expenses to reduce shareholders' incomeears.

While it can work to reduce the ER tour agency, agencies usually require companies to wait for the expenditure to be realized to report and deduct. The taxation of the company may be higher than the income of the company. This creates a deferred tax asset. The company pays higher taxes because at present it cannot deduct warranty expenses. In essence, the Company will subscribe to this income tax and then will be able to take advantage of the future advantage in the form of lower taxes as soon as it has a applicable warranty expenses.