assuming CT means current tax, it is because current tax goes to P&L while liabilities go to B/S. Different calculations, deferred tax don't affect current tax
Well, if you buy an asset for £1000, that's how much the asset is "worth". After the first year, if you are able to claim a tax expense of 20%, then you can claim £200 (£1000 * 0.2). The value of the asset carried forward is therefore £800 (£1000 - £200), and that value is referred to as the tax base. At the end of the second year the tax base will be £640, and so forth. Does that make sense?
