In order to have an idea of what a deferred tax asset is, first of all it is necessary to understand what is the content of the concept of deferred tax, which the enterprise must pay with the profits received. In the most general sense, this tax acts as a liability for an enterprise or organization in the future. Moreover, the main reasons for their occurrence are the current problems in the field of the state of economic activity and payment of taxes.
This, to some extent, a conditional tax, can be calculated according to the financial statements of the enterprise or organization, as a rule, it is equal to the actual tax that must be paid by the economic entity in this tax period.
In such calculations, the differences between the tax and accounting data naturally arise, because they use different valuation techniques. These differences are temporary, but in the future they may lead to inconsistencies in the estimates of assets and liabilities, in the amounts of expenses and income that are taken into account in calculating taxes.
Calculations of this conditional tax are made, as a rule, using three methods. The method of deferral is that the deferred tax is established in accordance with the rate of income tax, which is legalized at the time of recognition of the difference. In the Russian Federation, this method of calculation was applied until 2010, then, in accordance with the regulation on accounting, the liability method was applied. This method involves accounting for the liabilities of the enterprise or the company on profits and losses. There is also a third method - the balance method, which consists in comparing the valuations of values according to the tax and accounting data.
On this basis, the deferred tax asset represents the portion of the deferred tax that objectively leads to a reduction in the amount of tax paid by the enterprise or organization to profit and which must be paid according to the current legislation in the next reporting period and beyond.
An entity recognizes a deferred tax asset at a time when the temporary differences already mentioned are formed, and provided that further, in the coming tax periods, it will receive a profit from which it will be able to pay the tax. In accounting, a deferred tax asset is recorded taking into account the amount of all such differences, exceptions are only cases where these differences are not reduced or completely eliminated.
The formula by which such deferred tax liabilities are determined has the form: Ho = BP x StH, where: Ho is the amount of the deferred asset, BP is the indicator of the temporary difference, StN is the value of the tax rate that is established by the current legislation.
In the accounting system, deferred tax assets are indicators that are reflected as stand-alone in a separate account that is designed to account for and reflect precisely deferred tax assets. It is also important that, as already mentioned, these assets are accounted for autonomously in accounting, that is, separately for each type of assets that are the source of the temporary difference in the valuation.
The differences themselves are formed as a result:
- the use of various methodologies for calculating depreciation that a particular enterprise or organization uses in accounting;
- recognition of the proceeds from the sold goods in the form of income from the normal economic operation of the enterprise;
- in case of violation of the rules for payment of profit tax by the enterprise or organization;
- the use of rules that do not correspond to each other and norms for the reflection of interest that an enterprise or organization pays for loans and borrowings.
In the accounting system, such assets are shown by reverse entries: for the accrual of Дт 77 - Кт 68 and, accordingly, for the repayment Дт 68 - Кт 77.