Asian Journal of Research in Banking and Finance
Year : 2011, Volume : 1, Issue : 2
First page : ( 58) Last page : ( 67)
Online ISSN : 2249-7323.

Convergence in accounting the deferred tax

Dr. Gnanakumar P. Baba*, Professor & Head

*Department of Commerce, Sri Krishna Arts and Science College, Coimbatore – 641008, Tamil Nadu.

Online published on 12 November, 2011.

Abstract

Due to variation in the disclosure norms among the direct taxes and accounting standards, the firms are following dual standards. The investors’ perceptions towards profitability are inflated or deflated by the deferred taxes. Hence this conceptual study aims to bring out the effect of deferred taxes in accounting policies. The deferred taxes are in increasing trend during the last five years. The variation in tax rate and virtual certainty leads to that effect. Hence the fiscal policy regulators should consider the deferred tax trend in fixing the corporate taxes. Then only the timing differences will be adjusted with the tax rate differences.

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Keywords

AS 22, FASB, GAAP.

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