Oil & Gas
Deferred Tax — Development Capex (Accelerated Tax Depreciation)
Recording the deferred tax liability where accelerated tax depreciation on development assets exceeds accounting DD&A.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Deferred Tax Expense (Capex Timing) | Expense (+) | 8,000,000.00 | - |
| Deferred Tax Liability (Development Assets) | Liability (+) | - | 8,000,000.00 |
💡 Accountant's Note
Many petroleum fiscal regimes allow 100% first-year capital allowance on development spending. Where accounting DD&A is spread over reserves life, the faster tax deduction creates a taxable temporary difference and DTL.
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