Notes 5

Notes 5 - o Probable: Record and footnote Deferred taxes...

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Balance Sheet: Liabilities Contingencies: o Potential losses and gains whose resolution depends on one or more future events o When do we put contingent liabilities on B/S? Information prior to issuance of financials indicates probable asset impairment or liability Or the amount of the contingent liability/ loss o Remote: Ignore o Reasonably possible: Disclose in footnote As analyst, would want to include this in ratios (full amount)
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Unformatted text preview: o Probable: Record and footnote Deferred taxes and related disclosures: o What are taxable income and NI not equal? Congress doesnt care about matching revenues and expenses They want to raise company revenues o Companies report receivables as NI But they cant pay taxes on that just yet, until they receive it Becomes deferred tax liability...
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