Deferred tax asset

A deferred tax asset is income taxes that are recoverable in a future period. It is caused by the carryforward of either unused tax losses or unused tax credits. It is classified as an asset, and appears on the balance sheet.

There are a number of reasons why a deferred tax asset occurs, such as overpaying taxes in the current period or differences between the accounting standards and tax laws.

Related Courses

Accounting for Income Taxes