{"id":170680,"date":"2025-04-15T06:32:20","date_gmt":"2025-04-15T06:32:20","guid":{"rendered":"https:\/\/namso-gen.co\/blog\/what-is-deferred-tax-liability\/"},"modified":"2025-04-15T06:32:20","modified_gmt":"2025-04-15T06:32:20","slug":"what-is-deferred-tax-liability","status":"publish","type":"post","link":"https:\/\/namso-gen.co\/blog\/what-is-deferred-tax-liability\/","title":{"rendered":"What is deferred tax liability?"},"content":{"rendered":"

Deferred tax liability is a tax obligation that is not due immediately but will be paid at a future date. It arises when a company’s taxable income is greater than its accounting income, resulting in taxes being deferred to a later period.<\/p>\n

Deferred tax liability is recognized on a company’s balance sheet and represents the income tax amount that a company will owe in the future. This liability arises from the temporary differences between accounting income and taxable income, such as depreciation expenses and revenue recognition.<\/p>\n

When a company reports lower taxable income than accounting income, it creates a deferred tax liability on its balance sheet. This means that the company will have to pay more in taxes in future periods when the temporary differences reverse.<\/p>\n

Companies must regularly review their deferred tax liabilities as they can fluctuate based on changes in tax laws and regulations. It is essential for companies to accurately account for deferred tax liabilities to avoid potential tax liabilities and comply with financial reporting standards. <\/p>\n

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