SAT Case 12-6-Power Point-2010

SAT Case 12-6-Power Point-2010 - MethodsofInterperiodTax...

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Methods of Interperiod Tax  Allocation Accounting 5120 Seminar in Accounting Theory Chapter 12 – Accounting for Income Taxes Case 6 Presented By: Babak Mammadov Curtis Grumke
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Taxable Income & Financial Income Taxable income is calculated in accordance with prescribed tax regulations and rules Financial income is measured and reported in accordance with generally accepted accounting principles Differences between taxable income and financial income occur because tax regulations and GAAP frequently differ
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Interperiod Tax Allocation There are three general views regarding interperiod income tax allocation: 1. No Allocation 2. Partial Allocation 3. Comprehensive Allocation
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Interperiod Tax Allocation Allocation of income taxes to accounting periods Results when timing of revenue and expense recognition is different in the income statement and tax return
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Interperiod Tax Allocation Allocation of income taxes to accounting periods Results when timing of revenue and expense recognition is different in the income statement and tax return
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Primary income allocation issue is whether and how to account for the tax effects of temporary differences between taxable income and pre-tax financial accounting income. The issue is still controversial and debated among
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SAT Case 12-6-Power Point-2010 - MethodsofInterperiodTax...

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