Application of AS-22 on AS-19

Hello everyone thanks for the appreciation for my last article “why AS 22 is applied”, coming with another article application of AS-22 on AS -19 “leases”. I am writing this article to discuss with you all how AS- 22 deferred taxes is applied on AS-19 There are two types of lease 1) Financial lease 2) Operating lease Financial lease is lease where risk and reward are also transferred to lessee by lessor Operating lease means lease other than financial lease In case of financial lease we get the ownership of asset so we charge depreciation on asset but in case of income tax they don’t consider asset on lease as an asset so depreciation and finance charges are not allowed, only lease rentals paid are allowed as expense. So DTA/DTL are created on such difference