[Solved] Deferred Income Taxes in Balance Sheet

Welcome back to our blog today we are going to show deferred income taxes on the balance sheet so if you are an accounting student and learning CA or Accounting then you should read this spot till the end.

Deferred Income Taxes in the Balance Sheet

Before we solve the example let me tell you about what is deferred income taxes in the balance sheet.

"Deferred income taxes in a balance sheet represent the tax effects of temporary differences between the accounting income and taxable income, resulting in either future tax assets or future tax liabilities."

Deferred Tax Assets Example:

• Depreciation
• Bad Debt Allowance
• Revenue Recognition
• Inventory Valuation

Deferred Tax Liability examples:

• Accelerated Depreciation
• Asset Revaluation
• Unearned Revenue
• Revenue Recognition Timing

Deferred Income Taxes in Balance Sheet Example

Assets	Amount (INR)		Liabilities & Equity	Amount (INR)
Assets:			Liabilities:
Current Assets:			Current Liabilities:
Cash and Cash Equivalents	50,000		Accounts Payable	15,000
Accounts Receivable	30,000		Short-term Loans	10,000
Inventory	40,000
Total Current Assets	120,000		Total Current Liabilities	25,000
Non-Current Assets:			Non-Current Liabilities:
Property, Plant & Equipment	150,000		Long-term Debt	80,000
Intangible Assets	25,000		Deferred Income Taxes	10,000
Other Investments	10,000
Total Non-Current Assets	185,000		Total Non-Current Liabilities	90,000
Total Assets	$305,000		Total Liabilities	115,000
Equity:	Amount (INR)		Owners' Equity:	Amount (INR)
Share Capital	100,000		Common Stock	50,000
Retained Earnings	95,000		Retained Earnings	95,000
Total Equity	195,000		Total Owners' Equity	145,000
Total Liabilities & Equity	305,000		Total Liabilities & Equity	305,000

Explanation:

In this given balance sheet, you'll find a line for "Deferred Income Taxes" under Non-Current Liabilities, amounting to 10,000.

Conclusion

I hope you find this example about "deferred income taxes in the balance sheet" and with the help of it, you learn how to record deferred income taxes in the balance sheet.