Chapter 16 Flashcards
Deferred Tax Liability
Accrual basis, amount anticipates activites will lead to future taxable amounts
Deferred Tax Asset
Reflecting a benefit of future deductible amount`
Tax Expense
Current portion for current year in IS
4 step oprocces
Calc Taxes payable
Calc Ending DTAa nd DTLs
Calc change in DTA and DTL
Plug Tax expense
Book Value
Original Value
Tax Basis
original value for tax purposes reduced bt any amounts included to date on tax return
Valuation Allowance
if some portion or all of a DTA will not be realized
Tax Rate Considerations
DTL/DTA= Temp Difference x Currently enacted tax rate effective in the yea the temp diff reverses
Changes in Tax Laws
Effect is reflected in Ope Inc in the year change is enacted
Multiple Temporary Differences
Use the same approach as temp differences. Categorized: Future taxable amount/ future deductible amounts
Net Operating Losses
negative taxable income on a tax return. Create a carryforward
Recognize in the year the loss occurs
NOLs dont expire
Carryforward
Creates a deferred tax asset
Income Tax Expense
Current portion, deferred portion, adjustment due to tax laws, beginning of the year valuation, and tax credits
Disclosing DTADTL
Disclose all DTL and DTA, total allowance, net change
Uncertainty of income taxes
Mngmt tax position frequently are subjected to legal scrutiny before the uncertainty
