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Unformatted text preview: riod (i.e., more revenue or less expense has been recorded for GAAP purposes). Therefore, a deferred tax asset associated with revenue recognition implies that the firm has recorded less revenue for GAAP purposes than for tax purposes since the beginning of time. A decrease in that asset position over a single period implies that, for that period, the firm recorded more revenue for GAAP purposes than for tax purposes (i.e., the asset position reversed during the period). In addition, note that amounts for net operating loss carryforwards and the valuation allowance are included in these tables. Tax note Cheat Sheet – Table 4
The last table gives you a reconciliation from a tax expense number (or effective tax rate) using just the federal statutory rate to the actual tax expense number (or effective tax rate) on the GAAP income statement. The reconciling items include: adjustments for state and local taxes net of the federal benefit, differences between foreign tax rates and the federal statutory rate, permanent differences (e.g. nondeductible goodwill amortization), tax credits, and changes in the valuation allowance....
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- Fall '14