Carry Forward (Tax Provision)

Carry Forward (Tax Provision) refers to the practice where a company records current tax losses or credits that it cannot fully utilize in the current year and instead applies them to reduce taxable income in future years. This helps the company manage its tax liabilities more effectively, ensuring it pays only what is appropriate over time. Essentially, if a business makes a loss this year, it can "carry forward" that loss, using it later to offset profits when they occur, providing financial flexibility and reducing future tax burdens.