Deferred Tax Asset is treated as Fictitious Assets

Explanation:
Deferred Tax Asset refers to the future tax benefits that a company will enjoy as a result of temporary differences between its accounting and tax records. These temporary differences can occur due to various factors such as depreciation methods, timing of revenue recognition, or differences in the treatment of certain expenses for tax purposes.

Deferred Tax Asset is classified as a fictitious asset because it does not have a physical existence and represents a future economic benefit. Fictitious assets are non-physical assets that do not have any realizable value and cannot be converted into cash or sold. They are recorded in the balance sheet to comply with accounting principles but are not considered as true assets.

Reasons for treating Deferred Tax Asset as Fictitious Assets:

1. Non-physical nature: Deferred Tax Asset does not have a physical existence and cannot be touched or seen. It represents future tax benefits that are expected to be realized over a period of time.

2. Lack of realizable value: Unlike fixed assets or current assets, Deferred Tax Asset cannot be sold or converted into cash. It represents future tax benefits that will be used to offset tax liabilities in future periods.

3. Intangible in nature: Deferred Tax Asset represents the future economic benefits arising from temporary differences between accounting and tax records. These benefits are intangible in nature and cannot be measured accurately.

4. No direct impact on cash flow: Deferred Tax Asset does not directly impact the cash flow of a company. It represents future tax benefits that will be realized over a period of time and used to offset tax liabilities.

5. Disclosure in financial statements: Fictitious assets, including Deferred Tax Asset, are disclosed in the financial statements to provide a complete and accurate picture of a company's financial position.

In conclusion, Deferred Tax Asset is classified as a fictitious asset due to its non-physical nature, lack of realizable value, and intangible characteristics. It represents future tax benefits that will be utilized to offset tax liabilities and does not have a direct impact on the cash flow of a company.

D) fictitious assets