Deferred Tax DTA/DTL
Balance-sheet accounts that capture timing differences between accounting (book) profit and taxable profit, recorded as a future tax saving (asset) or future tax bill (liability).
What it is
Deferred tax arises because the income a company reports to investors (book income) and the income it reports to the tax authority (taxable income) are measured under different rules, creating temporary differences that reverse over time. A deferred tax liability (DTL) is tax a company expects to pay in later periods — most often because tax depreciation is taken faster than book depreciation. A deferred tax asset (DTA) is a future tax saving the company expects to use later, such as carried-forward losses (NOLs in the US, non-capital losses in Canada) or expenses that are deductible only when paid. These are accounting estimates, not cash, and they sit on the balance sheet until the underlying difference reverses.
Why it matters
Deferred tax balances tell you whether a company's reported tax bill is being pushed into the future (a DTL, which boosts current free cash flow) or whether it is sitting on tax savings it may never realize (a DTA). The key pitfall: a large DTA is only worth something if the company generates enough future taxable income to use it — when that is doubtful, accountants must offset it with a valuation allowance (recorded only against DTAs, never DTLs), and a chronically loss-making firm's headline DTA can be largely written off. Conversely, a DTL tied to ever-growing capital spending may keep rolling forward and never actually reverse into cash tax, so treating every DTL as a near-term obligation overstates the liability.
How it's calculated
For each temporary difference, take the gap between the asset or liability's book carrying value and its tax base, then multiply that gap by the enacted future tax rate; a future deductible amount produces a DTA, a future taxable amount produces a DTL. A DTA is then reduced by a valuation allowance for any portion not "more likely than not" to be realized. Under both IFRS (IAS 12) and US GAAP (ASC 740, after ASU 2015-17) the net balances are reported as non-current.
How Quintarthai uses it
Deferred tax assets and liabilities appear in the balance-sheet section of each company page, so you can see whether a firm is deferring cash taxes or carrying loss-driven DTAs; the Knowledge Base covers the related effective-tax-rate and pre-tax-income line items.