Current and future tax consequences  LO3 Explain which of the following have current or future tax consequences. 1. Estimated warranty costs covering a 3‐year warranty period are expensed for financial reporting purposes over a 3‐year period but are treated as a tax deduction in the year in which a claim is made by a customer. 2. The company has recognised entertainment expenses in the current period for financial reporting purposes but these outlays are never deductible for tax purposes. 3. Insurance is paid 2 years in advance and a prepaid asset is recognised for accounting purposes. A tax deduction is claimed when the cash is paid.