DTAs / DTLs

• If book taxes are greater than cash taxes
• Means you paid less in cash, so you create DTL
• If book taxes are smaller than cash taxes
• Means you paid more in cash, so you create DTA
• The difference between the book and cash tax amount dictates the DTA/DTL running balance

(Accelerated depreciation is an example that creates DTL, the depreciation is accelerated on the cash tax statements, which means you pay less cash tax - which creates a DTL).