 |
Definition of 'Deferred Income Tax'
A liability recorded on the balance sheet that results from income already earned and recognized for accounting, but not tax, purposes. Also, differences between tax laws and accounting methods can result in a temporary difference in the amount of income tax payable by a company. This difference is recorded as deferred income tax.
|
 |
Investopedia explains 'Deferred Income Tax'
In other words, this would mean that income has been realized, but the tax on that income has not.
For example, let's say that the amount of tax that a business should pay is $100,000, but due to tax laws, the amount actually payable for this fiscal year is $85,000. The additional $15,000 would be a deferred income tax liability that the company would need to pay later on.
|
-
Learn this easy-to-understand technique of analyzing a company's financial statements and reports.
Read More »
-
Learn what it means to do your homework on a company's performance and reporting practices before investing.
Read More »
-
This measure has a bad rap, but it's still a valuable tool when used appropriately.
Read More »
-
|
|
