How to record DTA for worthless securities loss
Records a deferred tax asset when a security is written off for book purposes but does not yet meet the tax definition of worthlessness.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Deferred Tax Asset | Debit | 10,500.00 | - |
| Income Tax Expense - Deferred | Credit | - | 10,500.00 |
💡 Accountant's Note
Book accounting may require a write-down for impairment, while tax code often requires a security to be completely worthless or sold before a loss is deductible.
Practitioner & Systems Framework
💻 ERP Architecture
Map investment impairment accounts to tax temporary difference schedules.
⚠️ Audit Flags
Significant investment impairments in the financial statements that are not taken as tax deductions.
📄 Required Documentation
Investment statements, impairment analysis, and evidence of worthlessness (e.g., bankruptcy filings).
Automate this entry with the JEH Accounting Suite
Stop doing manual entry. Our VBA-powered ERP automatically generates your ledgers, Trial Balance, and Financial Statements.
No Subscriptions. Own your data.
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
Related Journal Entries
Discussion & Community Questions
Loading comments...