What Is Deferred Tax?

Deferred tax is an accounting concept which is caused because of the temporary differences between the value of assets or liabilities and their tax values or because of timing differences between the recognition of tax computations. Deferred tax can either appear as a tax liability or an asset. The simplest way to understand the concept of deferred tax is that it arises when the income tax expense on financial statements differs from the tax payable on the Tax returns.