BTDs$,$ also referred to as m$-$adjustments, can be favorable or unfavorable. An unfavorable adjustment increases book income to compute taxable income, in other words it increases your taxable income.A favorable adjustment is subtracted from book income to compute taxable income, in other words it decreases your taxable income. Determine which are favorable, unfavorable or varies. Federal Income Tax municipal bond interest meals and entertainment fines and penalties depreciation expense membership dues