Question
I'm reviewing a chapter and am trying to make sure I am understanding the vocabulary. As defined in the text and to my understanding... A
I'm reviewing a chapter and am trying to make sure I am understanding the vocabulary.
As defined in the text and to my understanding...
A deferred tax AMOUNT - is the difference between income tax expense and income tax payable; when negative it is an DTA because taxes will be lower in the future and when positive it is a DTL because taxes will be higher in the future.
(Income Tax Expense - Income Tax Payable) = Deferred Tax Amount
A temporary difference - is the difference between how an asset or liability is recorded on a tax basis versus the amount reported in financial statements
(Asset/Liability value according to tax basis - Asset/Liability value in books) = temporary difference
So my question: What is the difference between a deferred tax amount and a temporary difference? Are they they referring to the same number?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started