Approaches to accounting for deferred tax assets recognized in respect of tax losses

This paper considers approaches to accounting for tax losses. It is determined that the accounting methodology depends on the way they are utilised. Tax losses claimed as a refund (Loss Carry-Back) represent a financial claim to the state, therefore they are qualified as an asset (receivable) within the current tax component. Losses claimed as a deduction (Loss Carry-Forward) qualify as a deferred tax asset in the deferred component. Three approaches to accounting for tax losses attributable to deferred taxes are characterised: conservative, mixed and positive. It is established that in the concept of temporary differences the economic benefit from the resulting tax loss is identified in relation to its tax base; in turn, in the concept of temporary (term) differences the tax effect is part of the «difference» between the accounting and tax result. It is concluded that the Russian Accounting Standard (PBU) 18/02 «Accounting for corporate income tax calculations» has the following shortcomings: tax losses are incorrectly classified, and the methodology of their accounting is not defined due to the distorted base of tax effects distribution. The results of this work may serve as a basis for improving national accounting standards.