Notes 6

Notes 6 - o Deferred tax liability o Ex. Depreciation on...

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Balance Sheet: Liabilities Deferred taxes: o Deferred tax liabilities: Good Maximize book income Save taxes o Deferred tax assets: Bad Higher taxes Not shown on books Report first on tax return, revenue: o Deferred tax asset o Don’t want to show more taxable income than book income o Ex. Rent received in advance Report first on tax return, expense:
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Unformatted text preview: o Deferred tax liability o Ex. Depreciation on plant assets Report first on books, revenue: o Deferred tax liability o Ex. Installment sales (defer paying taxes until you have cash on hand) Report first on books, expense: o Deferred tax asset o Ex. Bad debt expense, warranty costs, pension expense, NOL carryforward...
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