If i understand it correctly, “gain/loss on available for sale securities” is not reported thru income statement and is directly included in other comprehensive income which forms part of shareholder’s equity. If that is the case, it is not making any impact on taxable and pre tax income. Then how can “gain/loss on available for sale securities” create deferred tax asset/liability?Plz correct me if my understanding the concent is wrong… thanks for ur time.
When in the future you sell A/S securities for a profit (loss), you will have to pay tax on capital gains (get a tax credit). That creates DTL (DTA) now. Does it help?