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AuthorQuestion Title
AS 22

A company has Rs 25 lac DTA balance as on 31-3-15. Current year there is DTA on account of current
depreciation 2 lac and DTL on account of reversing of timing differences (43 B)items of Rs 5
lacs. Quries are: 1) Can the current DTA (rs 2 lac) be set off against current DTL (5 Lac) and
the net computation for the year be shown at DTL 3 lac 2) Can this Net DTL of 3lac (or any other
amount) be adjusted against opening DTA of Rs. 25 Lac. 3) Further, as there is total uncertainty
about future earnings of the company, should the balance in DTA (Be it 25 lac as it is OR 22 (25-3)
lac) be charged to the P&L of the current years. Please reply in detail.
Naman Mishra
As per AS-22 "Taxed on Income", DTA/DTL can not be set off, unless the are reversal of the
already existing DTA/DTL. Therefore answer to your first question is - NO. You have to disclose
the DTA/DTL in the following manner - Note - Deferred tax assets/liability (net) A.
Deferred Tax Asset - On account of fixed assets - 2 lakh - On
account of expenses Opening - 25 lakh
less: reversal - (5) Closing
- 20 Lakh Total Deferred Tax Assets
- 22 Lakh B. Deferred Tax Liability, if any -
xx Deferred Tax Assets/Liability (net) - xxx lakh

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