Fundamentals
deductible after they are recognized in financial income
tax-deductible expenses exceed taxable revenues
Companies should classify deferred tax accounts as
taxable after they are recognized in financial income
Back 2 years and forward 20 years
Companies are required to report income before income taxes and income tax expense on the
The difference between the tax basis of an asset or liability and its reported amount in the financial statements
Means a level of likelihood of at least slightly more than 50 percent
What is "More likely than not"
the initial difference between the book basis and the tax basis of an asset or liability
What is originating temporary difference?
Carryforward NOLs up to 20 years
requires public entities to reconcile their effective tax rate with the appropriate federal statutory rate
What is the ASC 740?
Specific items that are included in pretax financial income but never into taxable income, or vice versa
Represents the increase in taxes payable in future years as a result of taxable temporary differences existing at the end of the current year
Occurs when eliminating a temporary difference that originated in prior periods and then removing the related tax effect from the deferred tax account
permit taxpayers to use the losses of one year to offset the profits of other years
A business should create a ________ for a deferred tax asset if there is a more than 50% probability that the company will not realize some portion of the asset
Represents the increase in taxes refundable (or saved) in future years as a result of deductible temporary differences existing at the end of the current year
Costs of guarantees and warranties are estimated and accrued for financial reporting purposes
debit Income Tax Refund Receivable
balance is subtracted from the deferred tax asset account to establish the balance sheet value for deferred tax assets