FRA - Account Types

Why these are considered Assets instead of Liability?

  • Accumulated Depreciation

  • Allowance for Bad Debt

  • Deferred Tax Items

Also, what is Comprehensive Income?

Both accumulated depreciation and allowance for bad debt are contra-assets. This means that they decrease the asset accounts (equipment/building and accounts receivable, respectively). This ensures that the two asset accounts aren’t overstated (the book value) and gives a net value.

Deferred tax items (I’m guessing deferred tax asset) derives from a difference in operating income and “tax base” income. The company paid for tax today, which means that it will pay less tax in the future. This account decreases income tax payable in the future, therefore making it an asset.

Thanks I actually found out the answer by doing further reading.