Defend The Asset/Liability Approach Of Accounting For Inter Period Income Tax Allocation

656 words - 3 pages

Team 2: Defend the asset/liability approach of accounting for inter-period income tax allocation.
The asset/liability method of income tax allocation is balance sheet oriented. The intent is to accrue and report the total tax benefit or taxes payable that will actually be realized or assessed on temporary differences when their respective future taxable or deductible amounts are expected to occur.
The book states 5 arguments:
1. The balance sheet is becoming more important financial statement. Reporting deferred taxes based on the expected tax rates when the temporary differences reverse increases the predictive value of future cash flows, liquidity, and financial flexibility.
2. ...view middle of the document...

- emphasizes the usefulness of financial statements in evaluating financial position and predicting future cash flows.
- Assets and Liabilities created by SFAS # 109 do meet the definitions in SFAC # 6.
- SFAS #109 states that it allows for the separate recognition and measurement of deferred tax assets and liabilities without regard to future income considerations
- Income tax consequences should be recognized in same accounting period as that event is recognized in the F/S. Most events will affect taxable income and pretax financial accounting income in same period, but income tax consequences of some events are deferred. Temporary differences will result from events that have deferred tax consequences.
- Recognition of deferred income taxes is consistent with accrual accounting. Under accrual accounting, there is an assumption that there will be future recovery and settlement of reported amounts of assets and liabilities. This makes the recognition of deferred tax consequences of those temporary differences that will become refundable or payable necessary.
- Under the asset/liability...

Other Essays Like Defend the Asset/Liability Approach of Accounting for Inter-Period Income Tax Allocation

Evaluating the Tax Incentives for Foreign Investors Policy

4086 words - 17 pages breaks. a) The only justification for favouring FDI over both foreign portfolio investment and domestic investment is the existence of market failure that is specific to multinational production b) G-24 and other countries offer myriad concessions to FDI, which violates the resident principle (by taxing non-resident income) and subjects FDI and foreign portfolio investment to unequal tax treatment; c) In theory, FDI raises national

The Enron Implosion And The Loss Of Respect For The Accounting Profession

5643 words - 23 pages -market rules, whenever companies have outstanding energy-related or other derivative contracts (either assets or liabilities) on their balance sheets at the end of a particular quarter, they must adjust them to fair market value, booking unrealized gains or losses to the income statement of the period. A difficulty with application of these rules in accounting for long-term futures contracts in commodities such as gas is that there are often no

Fundamentalism Describes People or Groups That Defend Tradition and Believe in the Literal Truth of Sacred Texts

883 words - 4 pages Fundamentalism describes people or groups that defend tradition and believe in the literal truth of sacred texts, they seek to return back to basics and do not like change. Giddens argues that fundamentalism has grown in reaction to globalisation and people are joining fundamentalist movements because in today’s society individuals are constantly faced with choice, uncertainty and risk. Fundamentalism offers individuals security and avoids any

Behind the Decline in Labor’s Share of Income

823 words - 4 pages return. The share of total income accruing to labor, the labor income share, is a closely watched indicator because it can affect a wide range of other important macroeconomic variables, such as income distribution, human capital accumulation, the composition of aggregate demand, and tax revenue. For decades, the labor income share has been fluctuating around a long-run value of approximately two-thirds. More recently, however, the share has been

Operators Focus on 3g Development as Uncertainty Around the Allocation of 4g Spectrum Continues: El Salvador: Jsbmarketresearch

1562 words - 7 pages El Salvador: Operators Focus on 3G Development as Uncertainty around the Allocation of 4G Spectrum Continues Released on 14th March 2016 Summary With revenue of $1.1bn in 2015, or 4.5% of GDP, the Salvadorian telecom and pay-TV services market is the third smallest in Latin America, beating only Bolivia and Nicaragua, both of which have lower PPP-adjusted GDP per capita levels. Pyramid Research expects total telecom service revenue will

The Skills Approach Analysis of Angela Merkel

747 words - 3 pages (Northouse, pg 44). In terms of politics, the technical skills necessary involves knowledge of foreign policy, an ability to effectively negotiate with other leaders and unions, and also an ability to enact effective policies for the area one governs. Angela Merkel is a prime example of the skills approach in relation to technical skills because of the fact that her successful tenure as the Chancellor of Germany was precluded by a late involvement in

How Far Were the Actions of the African Americans the Main Reason for the Advancement of the Civil Rights in the Period 1865-1980?

4828 words - 20 pages How far were the actions of the African Americans the main reason for the advancement of the Civil Rights in the period 1865-1980? “Power concedes nothing without demand, it never has and it never will”[1]. Said by Fredrick Douglass in 1857, an escaped slave who had bearded the brunt of the slave years. He had come to the realisation that African Americans had a fountain of “power”; however that power that they possessed would never

Was "The Era Of Good Feelings" An Accurate Name For The Period Between The War Of 1812 And The Rise Of Andrew Jackson? Why Or Why Not?

756 words - 4 pages Was "The Era of Good Feelings" an accurate name for the period between the War of 1812 and the rise of Andrew Jackson? Why or why not?The term ¡§the Era of Good Feeling¡¨ was first posted in a Boston newspaper, which impressed, James Monroe, the new American President's warm reception in Boston. The entire society was very anxious to turn back into a normal life when the War of 1812 ended; as a result, the term implied

The Importance of Accounting Theory in the Field of Accounting

1912 words - 8 pages that are the main focused in this paper is the income statement, the balance sheet and the statement of cash flows. An income statement is a financial statement for companies that indicate how net revenue is transformed into net income. The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported. Income statements should help investors and creditors determine the

The Tax Deductibility Of Expense In Slovak Law

854 words - 4 pages are only tax deductible if the debtor is in bankruptcy, the bankruptcy procedures has already started and the company has filed, within a stated period of time, an application with the relevant Court that has acknowledged the claim. This is very formal and time consuming approach and it may well happen that, although a receivable will never be paid, the amount can never represent a tax deductible cost. Tax deprecation Slovak tax deprecation

Case Study of “Rigorous or Not?: a Case of Auditor Judgment for Deferred Tax Issues”

2168 words - 9 pages the client's estimates and justifications for those estimates. The Tax Director mentioned that the Company uses “a conservative approach” in determining the profit margin for forecasting future taxable income and corresponding NOL utilization. According to professional accounting and auditing standards and using professional judgment, do you agree with the client’s approach? Conservative approach is a good way to maintain reliability for the

Related Papers

Income Tax Accounting Essay

1516 words - 7 pages 1040 Form Department of the Treasury—Internal Revenue Service U.S. Individual Income Tax Return Last name (99) 2011 , 2011, ending OMB No. 1545-0074 , 20 IRS Use Only—Do not write or staple in this space. For the year Jan. 1–Dec. 31, 2011, or other tax year beginning Your first name and initial See separate instructions. Your social security number Spouse’s social security number Apt. no. Beth R If a joint

The Write Down Of Impaired Asset; In Chapter 9

944 words - 4 pages caught onto every word the speaker is signing. In conclusion, these forms of non-verbal or non-written communication have a place in the expression of language. There is not a single way to express one’s self. Multiple avenues are used to express themselves. The use of body language uses movements of the body to express feelings. Sign language uses body movements to express letters, words, or even entire phrases. One problem is finding the best way to interpret exactly what the speaker wants you to understand. The best thing is that there is no set avenue of approach to get a person’s message across. Message sent.

Sculptures Of The Renaissance Period Essay

1377 words - 6 pages Sculptures of the Renaissance period Johnny R. Hilton ART/101 March 18, 2012 Kristy Yau “Madonna of humility” 1403

Item Gift Box Packaging Design And Style Approach For The Most Effective Sale Of The Goods

1082 words - 5 pages The saying goes precisely the same with gift box : "Buddha-gold, guys clothing" product also. In the marketplace, when shoppers do not understand how some intrinsic high quality of goods, nor to judge other individuals based on their quality, and generally relied on impressions of your packaging to ascertain regardless of whether or to not obtain. Because it enables buyers to scan merchandise around the shelves for the moment, created a deep