# Deferred Tax

*Accounting & Reporting — Finicade finance glossary*

Deferred tax arises because accounting profit and taxable profit differ in timing — accelerated depreciation, provisions, losses carried forward.

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.

**Also known as:** deferred tax asset, deferred tax liability, DTA

**Related terms:** [Accrual Accounting](https://finicade.com/glossary/accrual-accounting), [Depreciation](https://finicade.com/glossary/depreciation), [Corporate Tax Rate](https://finicade.com/glossary/corporate-tax-rate), [Balance Sheet](https://finicade.com/glossary/balance-sheet), [Notes to the Financial Statements](https://finicade.com/glossary/notes-to-the-financial-statements)

Source: https://finicade.com/glossary/deferred-tax