Deferred tax asset is an asset on the balance sheet that a company can use to reduce its taxes in the future. This happens when a company makes net operating loses. These loses are added up as tax assets that can be used to offset taxes in the future.
Dec 17 2013 06:32 PM
Deferred tax liability is created on the balance sheet when there is a difference in the accounting the company does for tax and reporting purposes. The company may have paid less tax than needed and it owes some tax later in the year. This becomes a liability