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Weekly Summary 3

Intermediate Accounting

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This chapter was interesting because so far in accounting there has not been much discussion about taxes and how corporations and companies account for the taxes. The chapter focuses on proper accounting practices for taxes. The first main point of this chapter is to show the affect that temporary differences have on future taxable and deductible amounts. Future taxable amounts occur when companies recover the receivables and future deductible amounts occur when companies settle the liabilities. These result in deferred tax assets which is the next subject brought up in this chapter. The chapter then goes into detail about how to properly account
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Unformatted text preview: for the deferred tax assets and liabilities. The chapter then touches on how to deal with different tax rates and the effect they will have on the taxes. That brings us to, in my opinion, the most interesting part in the chapter in which the book describes loss carrybacks and loss carryforwards. It is interesting to me because the government allows companies a tax break when said company experiences a loss in a year. These policies allow companies to make mistakes or have misfortunes and still stay afloat. In my current role most of the tax work is outsourced to CPA firms and we do not deal too much with the taxes....
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