alleryStart learning →For ordinary deferred tax assets, AS 22 requires what level of certainty of future taxable income?
AAbsolute certainty
BReasonable certainty
CVirtual certainty
DMere possibility
Answer & Solution
Correct answer: B. Reasonable certainty
Outside the case of losses and unabsorbed depreciation, reasonable certainty is the standard for recognising deferred tax assets.
Keep practising AS 22 Taxes on Income
Browse all AS 22 Taxes on Income questions for CA Inter, or explore more Accounting topics.
Related questions
The financial statements recognise the tax effect of which transactions?Section 43B allows certain expenses such as taxes, duty, cess and fees on which basis?A difference in depreciation method, such as SLM against WDV, between books and tax is a:Payments to non-residents disallowed under section 40(a)(i) until tax is deducted give a:Income spread over several years in the accounts but fully taxed on receipt creates a:Income credited to the profit and loss statement but taxed only in later years creates a:If an asset's tax base is lower than its book value, the company recognises a:A bad debts provision is expensed in books but tax relief comes only when it is utilised.