Deferred Tax Asset
Accounting glossary · Understand, connect, apply
A deferred tax asset represents potential future income tax relief from deductible temporary differences or qualifying unused tax losses or credits. IAS 12 recognition depends on its conditions for use.
Example
A recognised warranty liability will yield a deduction of 10,000 when claims are paid. At an applicable rate of 25%, this can give a deferred tax asset of 2,500 if recognition conditions are met.
Remember the difference
Check whether sufficient taxable profit is likely to be available to use the relief. The asset is different from a current tax refund already due.
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Published 9 November 2026. Prepared with AI assistance. Examples are fictional and simplified for learning.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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