A deferred tax liability is what?

The rules in accordance with which the accounting of income and expenses for taxation purposes and preparation of financial statements are recorded have a number of differences. In this regard, the amounts reflected in some documents do not coincide with those of others. Accordingly, when reporting is often difficult.

PBU 18/02

This provision was introduced to reflect the differences in tax amounts reported. PBU differentiates the indicators into permanent and temporary ones. The first include income / expenses, which are reflected in accounting, but never taken into account the tax base. They can also be taken into account in determining the latter, but they can not be fixed in accounting records. Temporary refers to income / costs that are reported in a single period, and for taxation purposes are taken in a different time interval. Due to these differences, a deferred tax liability appears. This PBU also provides for a certain order of reflection of deductions from profits. The conditional expense / income is equal to the product of the rate of payment in the budget and accounting profit. The adjustment of this indicator is influenced by deferred tax assets and deferred tax liabilities, as well as permanent differences. As a result, the amount that is reflected in the declaration is determined.

Terminology

The deferred tax liability is that part of the deduction to the budget, which in the next period should lead to an increase in the amount of payment. For brevity, in practice, the abbreviation IT is used. Deferred tax liability is a temporary difference that arises if the income in the financial statements before taxation is greater than in the declaration. To determine the indicator, use the formula:

ITO = deduction rate from profit x time difference.

Deferred tax liabilities: account

The accounting documentation provides for a special article, which reflects IT. This is cc. 77. Deferred tax liabilities on the balance sheet are shown on page 1420. In the statement of losses / profits this value is reflected in line 2430.

SHE IS

If the deductible difference is multiplied by the deduction rate, the amount already paid to the budget, but to be credited in the forthcoming period, is obtained. This value is called a deferred asset. SHE is the positive difference between the current, the actual deduction and the conditional expenditure by the amount calculated from the profit. It is written off from the counter. 09. If depreciation is envisaged in the future cycle, then it is not charged to the OS in accounting, and in the tax cycle it is calculated.

Time difference (IT)

It is defined similarly to the method given for SHE. However, this quantity has the opposite sign. A deferred tax liability is the amount that results in an increase in payments to the budget in future periods. These deductions will need to be paid later.

Specificity

Accounting for deferred tax liabilities is carried out in the period in which there are corresponding differences. In order to better understand the essence, it is possible to take VAT from the profit in determining the moment of the appearance of amounts to be deducted to the budget in the forthcoming cycle. As a future deduction, VAT is recognized as an acc. 76. Similarly, IT is recorded, only under Article 77.

Adjustments

In the process of reducing or completely eliminating temporary differences, the deferred obligation will also decrease. In the analysis of the article, the information will be adjusted. When the asset object is disposed of or the obligation under which accruals are performed, these amounts will not affect the amount of deductions in future periods. In such cases, the write-off of IT is carried out. The deferred liabilities are accounted for in the profit and loss account. They are shown in debit. 99. At the same time, sc. 77 is credited. In the reporting period, in the process of determining the indicator on page 2420, the repaid amount and the indicator of newly emerged ITOs are paid. When filling lines 2430, 2450, you should use the "debit-credit" rule. By sc. 09 and 77 of the incoming turnover subtract the expense, then determine the sign of the result. Reporting in the corresponding lines indicates a positive or negative (in parentheses) value. If you change the IT to the side of the increase, the deduction from the profit will decrease. And, conversely, if you reduce it, the payment will increase.

Current deductions from profit

It consists of the amount actually paid to the budget within the reporting period. This value is calculated on the basis of the size of the conditional income / expense, as well as its adjustments to the indicators used in the formation of SHE, IT and permanent payments. For calculations, the following formula is used:

TH = UR (UD) + PNO - PHA + SHE - IT.

The calculation model is defined in PBU 18/02, in paragraph 21. The correctness of the calculation can be verified using the alternative formula:

ТН = taxable profit for the reporting period х rate of deductions to the budget.

If the organization does not make permanent tax payments, the absolute difference between the notional amount calculated from the profit and the current one will be equal to SHE - IT. This indicator will affect the amount of actual deductions.

Deferred tax liability: transactions

In accordance with the structure of reporting of losses and profits for determining the net income, the equation PP = BP + SHE - TNP - IT is used, in which:

• BP - accounting profit;
• TNP - current tax.

In this formula, OHA and IT are used, which are reflected in the balance sheet at:

• ДБ сч. 09 Cd. 68;
• Db cc. 68 Cd. 09;
• Db cc. 68 Cd. 77;
• Db cc. 77 Cd. 68.

They affect the amount of deductions from profits. At the same time, these articles do not refer to net income. To reflect the way of calculating the actual deductions from profit and simultaneously generating information on receipts for distribution, you can show 2 items. They are, in fact, deferred tax liabilities and assets that affected the AC. 99 and 68. In doing so, IT is allowed to enter on a free line or in an explanatory note.

Practical use

How does the deferred tax liability show? An example can be given such. Suppose an organization purchased a computer program. The cost of software - 8 thousand rubles. At the same time, developers limited the period of use of the program. In this regard, the director of the enterprise ordered to write off the costs of acquiring software for two years. In the financial documentation, the amount is included in deferred expenses. It is allowed in the tax accounting to write off the cost of the program at a time to expenses. As a result, there was a temporary difference. The conditional payment from the profit will be higher than the current one by the amount of IT: 8000 x rate of deduction. In the financial documentation this will be reflected like this:

• Дт сч. 99 Cd. 68 (09) - conditional payment;
• Дт сч. 68 (09) Cd. 77 - IT.

In this case, the article, which reflects the amount of future payments, acts as a passive balance sheet. It accumulates the amount of tax that is subject to additional payments in future periods. The write-off of IT is made in the forthcoming cycles. In the example under consideration, the computer program dropped out of the tax reporting. Accordingly, it does not affect the costs of the enterprise in any way. In accounting, on the contrary, write-off applies only to a certain part of the program, which falls on the current financial period. Information is reflected in the following way:

• Дт сч. 20 Cd. 97 - part of the cost of the computer program (not including VAT);
• Дт сч. 19/04 Cd. 97 - amount of deductions for value added.

In such a situation, the amount of current payment to the budget will be greater than the conditional one. Part of the latter should be paid. In the postings, a debit turnover is obtained.