Tax Lecture2 Slides - Understanding Income Tax Reporting...

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Understanding Income Tax Reporting Deferred Taxes – Day 2 Slides
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Understanding the tax footnote We have addressed the following questions: w What is on the balance sheet and income statement for income taxes? w What are some of the conceptual problems with the reported numbers? We still have to address the following questions: w What is disclosed in the notes to the financial statements regarding taxes? w Why might the disclosure be useful for analysis?
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Understanding the tax footnote What Is Disclosed? w Components of deferred tax liabilities / assets w Amount of and change in the valuation allowance (i.e., DIT contra asset account for amounts that are not expected to be realized) w DIT liabilities not recognized w Current year effects of temporary differences w Components of income tax expense (federal, state, foreign) w Reconciliation of income tax expense to amount based upon statutory rate (amounts or percentages) w Tax loss carryforwards and credits
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MDC Example Disclosure Components of deferred taxes 2015 2014 Assets Gain on sale/lease-back 190 Total Assets 190 0 Liabilities Depreciation 360 Total Liabilities 360 0 Net Liability 170 0
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MDC Example Disclosure Continued Components of deferred tax provision 2015 2014 Gain on sale/lease-back ( 190 ) Depreciation 360 Total 170 0
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MDC Example Disclosure Continued 2015 2014
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Tax Lecture2 Slides - Understanding Income Tax Reporting...

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