Deferred tax assets

Deferred tax assets is a current asset that appears on the balance sheet of a company's financial statement and it occurs in the two noteworthy instances:

First instance- According to accounting standards a certain income cannot be recognized in the current accounting period (because it has not been earned), but for tax purposes  said income must be reported (you have to pay tax on said income in the current tax period). What happens is that your income tax expense as recorded on the income statement is lower than the actual amount of income tax you must pay in the current period in accordance with tax laws. This results in deferred tax assets (tax payable minus tax expense).

Second instance- Let's say that in accordance with accounting standards, you must recognize a particular expense in the current accounting period (it has been incurred), but for tax purposes you cannot claim said expense in the current period. This means that on the income statement your net income is lower, and so your "income tax expense" is lower than the amount of income tax you must pay in the current period. For instance if according to tax laws what you have to pay is $1000 (there's an expense you have incurred in the current accounting period but can't claim in the current tax period that would have reduced the amount of taxes you have to pay), and the amount of tax expense recorded on your income statement is say $500 because you accounted for an expense that reduced your net income, you end up with deferred tax assets of $500.

Deferred tax assets could also result from tax credits or losses that can be used in subsequent periods.