06-25-2009, 05:42 PM
What is Deferred Tax Reserve as used in NBFC Rules/Regulations? Is it different from Deferred Tax Liability, which is charged to P/L and not an appropriation
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by faisal_desperado</i>
<br />A <b>provision</b> is an unanticipated liablity or loss, which is charged against profits,
The actual liablity is uncertain unless there is a reasonable accuracy with regards to that item,
Example includes,
Provision for Taxations.( Liablity remains uncertain untill end of the period)
Provision for doubtful debts.(sometime further provision is required to be provided at the end while some time already provided provision proves more than sufficient)
provision for depreciation( Asset is subject to obsolesce, or any contingency may arise which results change in allowances)
<b>Reserve</b> is an amount of profit set aside untill it is needed for some particular purpose, a reserve may be created for Contingencies, Plant, Building or any unavoidable contingent loss.
<b>Fund </b> is a cash or cash equivalent, cash(Fund) may be invested in assets which could generate some profits i.e. securities,which could easily be converted into cash.or
Funds may be cash or asset which is sets aside to attain specific objective.
<b>Provisions and Reserves do not require cash and its equivalent to be set aside while funds require cash to be reserved.</b>
Best Regards,
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<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by faisal_desperado</i>
<br />A <b>provision</b> is an unanticipated liablity or loss, which is charged against profits,
The actual liablity is uncertain unless there is a reasonable accuracy with regards to that item,
Example includes,
Provision for Taxations.( Liablity remains uncertain untill end of the period)
Provision for doubtful debts.(sometime further provision is required to be provided at the end while some time already provided provision proves more than sufficient)
provision for depreciation( Asset is subject to obsolesce, or any contingency may arise which results change in allowances)
<b>Reserve</b> is an amount of profit set aside untill it is needed for some particular purpose, a reserve may be created for Contingencies, Plant, Building or any unavoidable contingent loss.
<b>Fund </b> is a cash or cash equivalent, cash(Fund) may be invested in assets which could generate some profits i.e. securities,which could easily be converted into cash.or
Funds may be cash or asset which is sets aside to attain specific objective.
<b>Provisions and Reserves do not require cash and its equivalent to be set aside while funds require cash to be reserved.</b>
Best Regards,
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