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Chapter 12 - Solution Manual

A parent entity shall have evidence of specific plans

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tax-free liquidation. A parent entity shall have evidence of specific plans for reinvestment of undistributed earnings of a subsidiary which demonstrate that remittance of the earnings will be postponed indefinitely. These criteria required to overcome the presumption are sometimes referred to as the indefinite reversal criteria. Experience of the entities and definite future programs of operations and remittances are examples of the types of evidence required to substantiate the parent entity's representation of indefinite postponement of remittances from a subsidiary. The indefinite reversal criteria shall not be applied to the inside basis differences of foreign subsidiaries. FASB ASC 12-4 Deferred Tax Benefits for the Oil and Gas Industry Search oil and income taxes 932-740-30 In applying the comprehensive interperiod income tax allocation provision, the possibility that statutory depletion in future periods will reduce or eliminate taxable income in future years shall be considered in determining whether it is more likely than not that the tax benefits of deferred tax assets will not be realized FASB ASC 12-5 Special Temporary Difference for Steamship Companies
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269 Search steamship and income taxes 995-740-50 50-1 This guidance establishes disclosure requirements applicable to unrecognized deferred tax liabilities of U.S. steamship entities arising from deposits in statutory reserve funds. 50-2 All of the following information shall be disclosed whenever a deferred tax liability is not recognized because of the exception to comprehensive recognition of deferred taxes for deposits in statutory reserve funds by U.S. steamship entities: a. A description of the types of temporary differences for which a deferred tax liability has not been recognized and the types of events that would cause those temporary differences to become taxable b. The cumulative amount of each type of temporary difference c. The amount of the deferred tax liability for temporary differences attributable to the statutory reserve funds of a U.S. steamship entity that is not recognized in accordance with paragraph 995- 740-25-2. FASB ASC 12-6 Deferred Taxes in the Casino Industry Search casino and income tax 924-740-25 a. Recognition of casino receivables is used for financial statements and the when-collected method is used for income tax reporting. b. Costs are deferred for financial statements and are charged to expense for income tax reporting. c. Progressive slot jackpots are accrued based on meter readings for financial statements and are charged against revenue when paid for income tax reporting. Room for Debate Debate 12-1 Team 1 Defend the deferred method of accounting for income tax expense The deferred method of income tax expense is grounded on the assumption that income tax expense is related to the period in which income is recognized. Under the deferred method income tax expense is measured as though the current period pretax financial accounting income is reported in the current year’s income tax return.
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