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Why should we recognize deferred taxation? Is this of any use in short run especially loss making companies?

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Question added by Muhammad Hanif Kasbati , Chief Financial Officer and Company Secretary , Pakistan Textile City Limited
Date Posted: 2016/01/19
Anil Chauhan
by Anil Chauhan , Senior Accountant , DOTW KUWAIT WLL

Deffered Tax is recognized due to the timing difference for clamming the capital Allowance/Depreciation as per Income  Tax and companies act 

 

We charge depreciation more when the Asset is new  so we pay less tax and when the asset is  towards its end we charge less depreciation hence we pay more Tax.

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