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

AssetsAmount (INR)Liabilities & EquityAmount (INR)
Current Assets:Current Liabilities:
Cash and Cash Equivalents50,000Accounts Payable15,000
Accounts Receivable30,000Short-term Loans10,000
Total Current Assets120,000Total Current Liabilities25,000
Non-Current Assets:Non-Current Liabilities:
Property, Plant & Equipment150,000Long-term Debt80,000
Intangible Assets25,000Deferred Income Taxes10,000
Other Investments10,000
Total Non-Current Assets185,000Total Non-Current Liabilities90,000
Total Assets$305,000Total Liabilities115,000
Equity:Amount (INR)Owners' Equity:Amount (INR)
Share Capital100,000Common Stock50,000
Retained Earnings95,000Retained Earnings95,000
Total Equity195,000Total Owners' Equity145,000
Total Liabilities & Equity305,000Total Liabilities & Equity305,000


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


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.