How do I verify the Deferred Tax Liability, as shown in the books of accounts of my client?
How do I verify the Deferred Tax Liability, as shown in the books of accounts of my client?
Chiranjibi Mar. 12, 2018
A deferred tax liability is an account on a company's balance sheet that is a result of temporary differences between the company's accounting and tax carrying values, the anticipated and enacted income tax rate, and estimated taxes payable for the current year.
You can verify this amount with the help of following points:
- Check the creation of Deferred Tax Liability and its actual working.
- Check how much Deferred Tax Liability is reversed during the year.
- Check that Deferred Tax Liability is disclosed as relating to depreciation and as relating to others.
- Check that the provisions of AS 22 “Accounting for Taxes on Income” have been complied with.
