What is deferred tax in SAP FIN-SEM - Strategic Enterprise Management?

SAP Term: deferred tax

• Component: FIN-SEM

• Component Name: Strategic Enterprise Management

• Description: Differential for aligning the effective tax expenses of the individual consolidation units with the fictitious tax expense of the corporate group, as part of the consolidated financial statements. The following assumptions must be given for posting deferred taxes: The group, as a fictitious uniform entity, is subject to taxation. The differences between the consolidated net income and the sum of the individual net incomes to be consolidated are temporary. The excess or insufficient tax expense resulting from the individual net incomes will be balanced in forthcoming periods. Automatic posting of deferred tax can be caused by: Financial statement imbalances arising from consolidation tasks such as the automatic elimination of interunit profit/loss in transferred inventory Transfers to revaluation reserves for example, from writedowns or writeups due to an impairment test

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• Key Concepts: 
  Deferred tax is an accounting concept used in SAP Strategic Enterprise Management (FIN-SEM) to recognize the effect of taxes on a company’s financial statements. It is based on the principle that taxes should be recognized in the period in which they are incurred, rather than when they are paid. Deferred tax is calculated by taking into account the differences between the tax base of an asset or liability and its carrying amount in the financial statements. 
  
  How to use it: 
  In SAP FIN-SEM, deferred tax is used to calculate the amount of taxes that will be due in future periods. This calculation is based on the differences between the tax base of an asset or liability and its carrying amount in the financial statements. The deferred tax calculation can be used to determine the amount of taxes that will be due in future periods, as well as to adjust for any changes in tax rates or other factors that may affect the amount of taxes due. 
  
  Tips & Tricks: 
  When calculating deferred tax, it is important to consider any changes in tax rates or other factors that may affect the amount of taxes due. Additionally, it is important to ensure that all assets and liabilities are properly accounted for when calculating deferred tax. 
  
  Related Information: 
  For more information on deferred tax and how it is used in SAP FIN-SEM, please refer to SAP’s documentation on Strategic Enterprise Management (FIN-SEM). Additionally, there are a number of online resources available that provide further information on this topic.