RECOGNITION OF DEFERRED TAX IN SMALL AND MEDIUM-SIZED ENTERPRISES: A CASE STUDY FOR THE CZECH REPUBLIC

The article concerns deferred tax and its significance for the information capability of the financial statement. Temporary differences between accounting and tax rules are the cause of the formation of deferred tax. The accounting and recognition thereof stems from generally accepted accounting principles. The accrual principle, the principle of caution and that of the functioning of the accounting entity in the foreseeable future are at issue. The majority of small and medium-sized enterprises are not obliged to account for and recognize deferred tax, although they may do so, and it is desirable from the perspective of faithful representation of the financial situation of the accounting entity. The conducted investigation in the form of a questionnaire survey ascertained whether accounting entities recognize deferred tax. If not, for what reasons; and if so, from which temporary differences they ascertain it.