Mat Credit Disclosure In Balance Sheet

The unavailed amount of mat credit entitlement if any should continue to be presented under the head loans advances.

Mat credit disclosure in balance sheet. To mat credit entitlement a c further mat credit is to be reviewed at each balance sheet date. Mat credit is rs 20. In the year of set off of credit the amount of credit availed should be shown as deduction from the provision of taxation on the liabilities side of the balance sheet. The profit and loss account and balance sheet are to be read with such notes.

A business s financial report is much more than just the financial statements. Since the company is liable to pay mat the company can avail the difference of the tax payable as per mat and tax payable as per normal provisions as mat credit. A financial report needs additional information called disclosures. In the above case mat credit rs.

In the subsequent year i e. To mat credit entitlement a c. Footnotes are one form of disclosure included in a financial report. Mat credit availed a c dr to mat credit entitlement a c.

The profit and loss account and balance sheet in case of companies is generally prepared according to the provisions of the companies act. The amount of mat credit can be set off only in the year in which the company is liable to pay tax as per the normal provisions contained in the act and such tax is in excess of mat for that year. Virtually all financial statements need footnotes to provide additional information for several of the account balances. Profit loss a c dr.

In the year of set off of credit the amount of credit availed should be shown as a deduction from the provision for taxation on the liabilities side of the balance sheet. While writing down the mat credit entitlement following entry is to be passed. 100 tax as per mat rs 80 tax as per normal provisions i e. The notes on accounts accounting policies disclosed and other statements enclosed are part and parcel of annual accounts.

The amount of mat credit would be equal to the excess of mat over normal income tax liability for which mat is paid during the said assessment year. The year of set off. For more information on mat credit refer to this article. The account head mat credit entitlement should be shown in the balance sheet under the head loans and advances on the assets side.

Which comprise the balance sheet as at 31st march 2017 the statement of profit and loss the statement of cash flows and the statement of changes in equity for the year ended 31st march 2017 and a summary of the significant accounting policies and other explanatory information together hereinafter referred to as financial statements.