Deferred taxes are reported on the balance sheet as what?

Deferred taxes are reported on the balance sheet as deferred inflows of resources. This classification reflects the future tax obligations that are not expected to be settled within the current accounting period. Deferred taxes arise from timing differences between the recognition of income and expenses for accounting purposes and the tax treatment of those items.

In governmental accounting, deferred inflows of resources represent acquisitions of net assets that are applicable to a future reporting period. This aligns with the concept that the entity has an obligation that will reduce future economic resources, thus affecting net position in the future. By recognizing deferred taxes as deferred inflows of resources, financial statements accurately depict the government's future financial obligations related to taxes, ensuring transparency and a proper understanding of the entity’s financial position.