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Essay / Research Paper Abstract
This 8 page paper considers the use of deferred tax liabilities by companies. Deferred tax can aid a company by its’ use as an asset, but can also appear as a misleading figure on the annual accounts due to different accounting techniques being used for the published and the tax accounts. An example of how this liability arises is given in using depreciation as an example. The bibliography cites 7 sources.
Page Count:
8 pages (~225 words per page)
File: TS14_TEdeftax.rtf
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Unformatted sample text from the term paper:
by individuals and corporations in varying forms both directly and indirectly. Many of the complications arise as not all taxes are paid directly in or after the period for which
they are due. The taxes are deferred taxes, and can be represented in accounting methods in different ways. Deferred taxes are subject to
interpretation in accounting, just as many other aspects of accounts are. General guidelines to the treatment of items in account exist but they are open to the interpretation of the
individual account to use in what they deem the most effect and prudent manner so as to lend the accounts a true and accurate picture. This trust and discretion given
to accountants varies from country to county, for example guidelines laid down by the regulatory authorities in a country such as the United States will be more technical in nature,
leaving the accountant with less discretion, whereas the equivalent guidelines in Canada or the United Kingdom will centre more the intent and meaning of the requirements, with more discretion left
to the accountant. With his in the way in which separate items are shown in accounts tends to vary not only from country to country, but from accountant to accountant.
The status of deferred taxes is also subject to much debate, the asset or liability created by them, and the allocation
for their payment must be allowed for, but the way in which this is achieved and interpreted in accounts may lead to investor confusion.
In its simplest terms where an organisation has a tax bill that is not due to be paid for some time, it may then have the benefit of the
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