Accounting for Income Taxes
In This Chapter
Looking at the difference between financial and taxable income
Walking through temporary and permanent differences
Talking about deferrals
Understanding the difference between income tax payable and expense
Considering the net operating loss effect on income taxes
Calculating interperiod and intraperiod tax allocations
Although preparing income tax returns isn’t part of your job description as a financial accountant, knowing how to account for income taxes is. Financial statements prepared according to generally accepted accounting principles (GAAP) differ from financial information you figure for income tax returns, so you may find revenue and expense differences between the two. In this chapter, you read about both types of differences: temporary and permanent.
In addition, you look at how to account for tax deferrals, which ...