AS - 22 - Accounting for Taxes on Income

AS 22 Details Tax Accounting: Focus on Matching Concept, Deferred Tax Assets/Liabilities, and Disclosure Requirements.

Accounting Standard (AS) 22 outlines the accounting treatment for taxes on income, focusing on the matching concept where taxes are accrued in the same period as related revenues and expenses. It addresses differences between taxable and accounting income, which can be classified as permanent or timing differences. Timing differences result in deferred tax assets or liabilities, recognized based on the certainty of future taxable income. Deferred tax assets are recognized when there's a reasonable or virtual certainty of future income, while deferred tax liabilities are recognized for all timing differences. The standard mandates periodic reassessment of deferred tax assets and liabilities, with specific disclosure requirements in financial statements.