Accounting For Income Taxes Flashcards
0
Q
Total income tax expense/benefit
A
Current inc tax payable or refundable as determined on corp tax return
+/-
Change in deferred income tax asset/loan from beg to end of rptg pd
1
Q
Intro period tax allocation
A
= IDEA (IS) PUFER (OCI) Income from cont ops (gross, then tax) Discont ops Extraordinary items Acctg principle change (retrospective)
Pension plan funded status change Unreal g/l on AFS sec Foreign translation adj Effective portion of CF hedge Revaluation surplus (IFRS)
- everything except I = net tax
2
Q
Permanent differences
A
- tax exempt int (municipal, state)
- life ins proceeds on officers policy
- life ins perms when corp is beneficiary
- certain penalties, fines, bribes, kickbacks, etc
- nonded portion of meal & entertainment exp
- DRD for corps
- excess depletion over cost depletion
3
Q
1st = FS income Later = tax return inc
A
Tax inc later = future tax liab
- installment sales
- contractors acctg
- equity method (undistrib div)
4
Q
1st = tax return inc Later = FS income
A
Tax inc first = ppd tax benefit (asset)
- ppd rent
- ppd int
- ppd royalties
Ppds/unearned rev
5
Q
1st = FS expense Later = tax return exp
A
Tax deduct later = future tax benefit (asset)
- bad debt exp
- est liab/warranty exp
- start up exp
Estimates
6
Q
1st = tax return exp Later = FS exp
A
Tax deduct first = future tax liab
- dep exp
- am of franchise
- ppd exp (cash basis for tax)
7
Q
Investee’s undistrib earnings - income tax return (DRD)
A
0-19% own = 70% exclusion
20-80% = 80% exclusion
80+% = 100% exclusion
- permanent difference
8
Q
Dep method for tax > dep method for GAAP
A
Overpmt
Temp difference (incl in NI in X1 & TI in X2)
Will reverse in the future
- from future inc
Asset for “prepmt”
9
Q
How is a permanent difference disclosed?
A
It isn’t
