Hi all, Any help on this topic would be greatly appreciated… This may be a really silly questions… but just a little confused. I understand the concept of why and how deferred tax asset and liabilities exist, but does anyone know an easy way to work out if an item is actually an asset / liability?? Does it make a difference if the income tax amount is greater than or less than the financial reporting amount in working out if its an asset / liability?? I hope my question is clear… Thanks.
If you actually pay more taxes than you report, it is a DTA. If you pay less than you report, it is a DTL.