Deferred Income Tax

Accounting Corporate Finance Financial Terms Dictionary

Contents

Deferred income tax results from the difference in income recognition between tax laws (i.e. IRS) and accounting methods (i.e. GAAP).

Deferred income tax is shown as a liability in the balance sheet.
The difference in depreciation methods used by the IRS and GAAP is the most common reason for deferred income tax.
Deferred income tax may be classified as a current or non-current liability.