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 ?
Amortization of intangible assets and its related deferred taxation effect
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.
Provision for deferred taxation is made in respect of all material timing differences that have originated but not reversed by the balance sheet date.
4 million, but including deferred taxation was reduced to [pounds sterling]2.
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.
2013 2012 % change (US$000) Litigation-related investment income 38,847 32,457 20% Insurance-related income 20,910 16,152 29% Other income 903 5,628 Total income 60,660 54,237 12% Operating expenses - corporate and investment (11,367) (15,054) Operating expenses - insurance (6,779) (5,085) Profit before tax and the impacts relating to the Burford UK acquisition, the 2012 Reorganisation and UK Restructuring costs 42,514 34,098 25% Taxation* (2,276) (2,556) Profit after tax** 40,238 31,542 28% * Taxation does not include deferred taxation credit on amortisation of embedded value intangible asset.
Greek banks are in talks with the finance ministry to recoup some of the losses through deferred taxation, Provopoulos said.
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.
Deferred taxation Deferred taxation is provided on the liability method on all timing differences which are expected to reverse in the future, calculated at the rate at which it is estimated that tax will be payable.