how is deferred tax liability calculated 
a company might sell a piece of furniture for 1 000 plus a 20 sales tax payable in monthly installments by the customer the customer will pay this over two years 500 500 in its financial records the company will record a sale of 1 000 in its tax records it will be recorded as 500 per year for two years the deferred tax liability would be 500 x 20 100 