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AS 22
Accountancy
How unamortised preliminary expense as per tax records is DTA? Tax decreases because of it na?
Answers (16)
CA Suraj Lakhotia Admin
Prelim expenses is allowed over 5 years period. Tax will be less in future. so in present - an asset is created.
Sir in the first year DTA is created na? In subsequent years it is reversed na sir? Isn't this preliminary expense of subsequent year sir?
CA Suraj Lakhotia Admin
Preliminary expense is of first year
Sir... Then why it is given for tax only
CA Suraj Lakhotia Admin
For tax allowed for 5 years
Sir.. I am unable to get the point .. Sir if preliminary expense is 1,50,000 In tax it will be amortised for 5 years â?¹30000 In accounts its amortised in single year So in 1st year DTA will be created amd in subsequent years it will be reversed Is it correct sir?
Thread Starter
Christeena AmbelThen how in this qn DTA is created sir :(
Unamortised means not yet claimed in tax. To that extent there is a DTA.
CA Suraj Lakhotia Admin
Unamortised means not yet claimed in tax. To that extent there is a DTA.
Can you please elaborate sir
Thread Starter
Christeena AmbelCan you please elaborate sir
In question it is for first year only, don't complicate things.
Sahibdeep Singh
In question it is for first year only, don't complicate things.
Sir, if it is for first year, then where did the preliminary expense charged to accounting book gone? Then 1,50,000 should be charged in first year na?
Thread Starter
Christeena AmbelSir, if it is for first year, then where did the preliminary expense charged to accounting book gone? Then 1,50,000 should be charged in first year na?
Why are you bringing unknowns in the illustration. Question is simple, there is some unamortised expense as per tax record, which means in future, we shall have lesser tax liability, so you create DTA. Simple
Sahibdeep Singh
Why are you bringing unknowns in the illustration. Question is simple, there is some unamortised expense as per tax record, which means in future, we shall have lesser tax liability, so you create DTA. Simple
Sir but how? How in future we will be having lesser liability? Because in accounts preliminary expense are written off in the first year Then how we will be having lesser liability? Please explain sir
Thread Starter
Christeena AmbelSir but how? How in future we will be having lesser liability? Because in accounts preliminary expense are written off in the first year Then how we will be having lesser liability? Please explain sir
Suggest you to once re-visit the AS and concept. In case doubt remain after watching this, then you can get back. https://youtu.be/WMJWDyKp3X0
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