You're here:  Home --> Dictionary --> D --> DTA

Depreciation
Balance Sheet
Deferred Tax Liab
10-K

Deferred Tax Asset
Term category: Finance/Accounting
In 10 words or less:  An asset created by  a company "overpaying" its taxes during a given time.

Definition: A deferred tax asset is created by overpaying taxes during a given time period.  This usually occurs as a result of timing differences based on how the company depreciates its assets.  This deferred tax asset reduces the company's tax liability in the future.

StockJargon Advice: Deferred tax assets are good because they reduce the liability in the future.  Because this has value, they're recorded as an asset.

Investors should give these a little consideration when analyzing a company's financials because high deferred tax assets and liabilities may signal that the company is too aggressive in its accrual accounting.

Related Articles

Corporate Earnings
Learn how companies report their earnings and how to use this information to decide what stocks to invest in.

How to Read an Annual Report
This brief page guides you through how to read a company's annual report.

Beginner's Guide to Financial Statements
The SEC has put this page together to help investor's navigate the various financial statements.

Related Books

The Interpretation of Financial Statements by Benjamin Graham
How to Use Financial Statements by James Bandler
How to Read a Financial Report by John A. Tracy
Finance for Non-financial Managers by Gene Siciliano

# -A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z