dotamasta

Miss*Yiota Wrote:
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> Just read on Elan notes that a DTL usually arises
> when an asset's tax base is lower than its
> carrying value.
> But at the same time, the treatment of temporary
> difference says that when an asset tax base is
> greater that its carrying value, it reseults in a
> DTA.
>
> Si I'm confused. What is the difference between
> the 2 ?
>
> When do we have a DTL or a DTA from a liability or
> an asset exactly ?
>
>
> Also, regarding the valuation allowance, is it
> applicable for both IFRS and USGaap or only USGaap
> ? Thanks


Let me tell you the way I like to remember it to save time:

I say-

Asset CA > TB gives DTL (I have learnt this) .......(I)
Now if I change one thing, DTL changes to DTA. If I change both, DTL stays put. Let me show:

Asset CA < TB gives DTA (Inequality sign flips. Single change)
Liability CA > TB gives DTA (Asset in (I) changes to Liability. Single change)
Liability CA < TB gives DTL (Asset in (I) changes to Liability and sign flips. 2 changes)