Tax vs Accounting Differences
Sometimes I'm not taxed until collected.
What is the revenue tax treatment?
Both are reported on the income statement as components of income tax expense for the period.
What is deferred and current tax expense?
Future tax is the correct term under this accounting standard.
What is Future Tax under ASPE?
Deferred Tax is the correct term under IFRS.
A business loss may be carried back 3 years and forward this many years.
"what is 20 years?"
Must use deferred taxes method and calculate deferred income taxes for assets or liabilities
What is the policy choice used under IFRS
100% is usually deducted in earnings before tax.
What is bond/financial issuance costs accounting treatment?
This account is used when taxes have been carried into the future or taxes have been paid for.
What is deferred tax asset
FIT/DIT assets/liabilities are split into current and long term under this accounting standard.
"What is Future tax under ASPE?"
Under IFRS, all DIT/FIT assets and liabilities are long term.
A business would carry back a loss for this reason.
"What is to recover previous income taxes paid in previous years?"
A reconciliation between the income tax rate and the actual income tax expense recorded on the income statement
What is to be disclosed when using the taxes payable approach under ASPE, and always IFRS
Only half of the capital gain is added. Capital losses are only deducted against capital gains. Capital gain is proceeds less cost.
What is the tax treatment for capital gains/losses?
Recovery of an asset or settlement of a liability that is reported on the SFP will result in the company's having to pay income taxes in the future.
When a deferred or future tax liability is recognized on the current period's SFP?
You may only use one method to calculate FIT/DIT assets/liabilities under this standard.
What is the deferred tax method under IFRS?
Under ASPE, a business may have a policy choice to use either the deferred tax method or the taxes payable method.
Future taxes help to validate these accounting principles.
"what is the time value of money and relevance?"
(1) The recognition of current year’s amount of taxes payable or refundable, (2) and tax liabilities and tax assets for the future tax consequences (FIT) of activities that have been recognized in the financial statements or tax returns
What is the objective of the temporary difference method
The transaction is not taxed.
What is the tax treatment for corporate dividend income?
A regular business owner may not understand future income tax for this reason.
What is recording a future tax asset/liability, when the tax is not yet payable?
Under this accounting standard, an enterprise must disclose whose income is not taxed, if it is taxed directly to its owners.
What is ASPE?
IFRS does not have a specification for this, as this situation would be rare for a public company.
A company may carry forward a loss for this reason.
"What is little tax loss in previous years and expected tax loss in future years?"
The amounts of current and of future income tax expense or benefit included in income
What is to be disclosed when using future income taxes method
This amount is not included on the income statement. It only affects future income tax.
What is the loss carryforward for the accounting treatment?
The recovery or settlement will result in the company having to pay less tax in the future.
When a deferred or future tax asset is recognized on the current SFP?
A company may use a valuation allowance for future tax under this standard.
"What is ASPE?"
A valuation account is not used under IFRS
There is a limit of 3 year carrybacks for this reason.
"What is changing corporate tax rates causing less tax to be paid in the future?"
Only under ASPE are these two accounts disclosed separately
What is long-term and current assets