deferred income tax

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Deferred Income Tax

On a balance sheet, a tax that a company will owe on its income, but that has not yet been assessed. Because of differences between tax regulations and the Generally Accepted Accounting Principles, income may be recognized on a balance sheet for accounting purposes, but not for tax purposes. However, that income will eventually be recognized for tax purposes and income tax will then be assessed. This tax is called deferred income tax, and is recorded as a liability on the balance sheet.

deferred income tax

A liability created by income recognized for accounting purposes but not for tax purposes. The liability recognizes future taxes due when earned income is later reported for tax purposes. Use of accelerated depreciation for reporting to the Internal Revenue Service and straight-line depreciation for reporting to stockholders is one of the major reasons a firm includes deferred income taxes as a liability on its balance sheet.
References in periodicals archive ?
Deferred liabilities, comprising of deferred taxation and compensated leave absences at Rs 4.
Keeping the funds in the IRA until age 80, except for R1VIDs, will result in less taxation than even a taxable equity investment with completely deferred taxation of the growth.
4 million, but including deferred taxation was reduced to [pounds sterling]2.
Greek banks are in talks with the finance ministry to recoup some of the losses through deferred taxation, Provopoulos said.
The Bankers Life Interest Plus MYGA product preserves the advantages of the traditional annuity, namely low investment minimums, guaranteed rates, and deferred taxation.
And while net finance expense for the first six months is expected to increase due to a pounds 200m index-linked loan with the European Investment Bank and slightly higher inflation costs on its index-linked debt, a deferred taxation credit of pounds 50m is due, following the Government's decision to cut mainstream corporation tax from 26% to 25%.
A wholly-owned subsidiary of EIHL has entered into a sale and purchase agreement for the purchase of the Project, held by the wholly-owned subsidiary of EEH at the consideration, equivalent to the sum of the unaudited consolidated net asset value of the Project in the books of EEH as at completion with the value of the development site of the Project to be valued as at 24 November 2010 and adjusted for the deferred taxation recognized plus the amount of the shareholders' loan of the Project.
A second article, which will appear in the next issue, will probe into the legal and financial aspects of succession planning, including how owners can enjoy deferred taxation as a benefit of selling a family-owned business to its employees (which may include family members).
Tom Clougherty, executive director of the Adam Smith Institute, said: "Since all budget deficits eventually have to be financed, borrowing should be viewed as deferred taxation.
Gabriel Stein, chief economist at Lombard Street Research who calculates Tax Freedom Day, said: "Running up deficits can be described as a form of deferred taxation.
5% drop the airline attributed to more than MYR5 million in deferred taxation that negatively impacted otherwise strong results.
In addition, the transaction allowed our client to utilize tax-planning techniques, which deferred taxation on what would otherwise have been substantial sums subject to capital gains tax.