Chapter 19Accounting for Income Taxes

1. Why is pretax financial income different than taxable income?

2. What is the difference between interperiod tax allocation and intraperiod tax allocation?

3. What are examples of permanent differences between pretax financial income and taxable income?

4. What are examples of temporary differences between pretax financial income and taxable income involving revenues? Involving expenses?

5. When do you recognize a deferred tax asset? A deferred tax liability? How do you determine the amount?

6. What tax rates should be used to calculate Deferred Tax Assets/Liabilities? What if the rate changes?

7. When is it necessary to create a valuation account for deferred tax assets?

8. What are the significant components of income tax expense that should be disclosed?

9. How do you determine the balance sheet classification for deferred tax assets/liabilities according the the recent FASB update?