what is a deferred tax asset vs a deferred tax liability 
a deferred tax asset represents a financial benefit while a deferred tax liability indicates a future tax obligation or payment due for example retirement savers with traditional 401 k plans make contributions to their accounts using pre tax income when that money is eventually withdrawn income tax is due on those contributions 6 that is a deferred tax liability the bottom linea deferred tax asset relates to an overpayment or advance payment of taxes this can occur when there is a difference between when a tax authority recognizes revenue and when a company does based on the accounting standards that the latter follows or it may happen because a current loss can be carried forward and reduce a company s future tax liability a deferred tax asset can reduce a company s taxable income in the future deferred tax assets are financial assets as opposed to tangible assets that appear on a company s balance sheet as non current assets 