Deferred Tax Identification

I’m trying to come up with some quick, easy rules to remember on identifying DTA/DTL. The trick for me seems to be in the wording of the question and identifying carrying value vs tax base, and I need to make sure that I understand the implication of these different wording possibilities. Are these correct? DTL/DTAs DTL When: Tax Base or Tax Expense > Tax Carrying Value or Taxes Payable DTA When: Tax Carrying Value or Taxes Payable > Tax Base or Tax Expense

(Tax Base is taxable income)

(Tax carrying is pretax income)

Let’s think about the words. Deferred…tax…asset.

So…it’s deferred, meaning you don’t pay tax on it today, but rather some period in the future.

If it increases the amount you have to pay (in a future period) it must be a liability. And if it decreases what you have to pay, it must be an asset.

I wrote an article that addresses just this: