Deferred Tax
Also called: deferred tax asset, deferred tax liability, DTA
Deferred tax arises because accounting profit and taxable profit differ in timing — accelerated tax depreciation, provisions not yet deductible, losses carried forward. A deferred tax asset is future tax relief; a liability is tax postponed. Deferred tax assets only have value if future profits exist to use them, which is why a valuation allowance against them is a quiet admission that management doubts its own forecasts.