Oil & Gas
Deferred Tax on E&E Assets
Recognizing the deferred tax liability arising from the temporary difference on capitalized E&E costs.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Deferred Tax Expense (E&E Assets) | Expense (+) | 5,400,000.00 | - |
| Deferred Tax Liability (E&E) | Liability (+) | - | 5,400,000.00 |
💡 Accountant's Note
E&E costs are often immediately deductible for tax purposes but capitalized for accounting. This creates a taxable temporary difference. The deferred tax liability (DTL) is recognized at the applicable petroleum tax rate.
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