F6/M7 Income Taxes: part 2 Flashcards
1
Q
Two-step approach for recognizing an Uncertain Tax Position
A
- Recognition of the Tax Benefit
- Must have a >50% of winning
- If this is failed, recognize as income tax expense - Measurement of the Tax Benefit
- Amount that has a >50% chance of winning with Highest Taxing authority
2
Q
Deferred items are always non current, even if it reverses in a month
A
True
3
Q
Operating losses create a Deferred tax benefit if they are Carried Forward
A
True;
The tax benefit that arises from an operating loss that is Carried Back (Tax Benefit) is a current asset- receivable
4
Q
Operating Loss may require an allowance account if Carrying Forward
A
True
5
Q
Operating Loss Carryforward is a DTA
A
True
Dr: Deferred Tax Asset
Cr: Tax Benefit
6
Q
***Both a Carryforward and a Carryback reduce NOL, they are not a contra-expense
A
True
7
Q
On the Balance sheet, DTA and DTL are netted to show either a net DTA or a net DTL
A
True
