Asked by Isabel Sanchez on May 12, 2024
Verified
FASB Statement No.109 addressed both interperiod and intraperiod tax allocation issues.Discuss both interperiod and intraperiod tax allocation methods.
Interperiod Tax Allocation
The process of allocating income taxes over different accounting periods due to temporary differences between financial accounting and tax reporting.
Intraperiod Tax Allocation
The process of allocating income taxes between different parts of the financial statements within the same fiscal period.
FASB Statement No.109
A standard issued by the Financial Accounting Standards Board relating to income tax accounting.
- Understand the principle of intraperiod tax allocation and identify the situations where it is necessary.
Verified Answer
AC
Alexis CorderoMay 18, 2024
Final Answer :
Intraperiod tax allocation allocates income tax expense for financial accounting purposes to several items of income, including (a)income from continuing operations, (b)results from discontinued operations, (c)extraordinary items, (d)the cumulative effects of changes in accounting principles, and (e)prior period adjustments.Interperiod tax allocation, on the other hand, involves the allocation of a corporation's income tax obligation as an expense to various accounting periods.
Learning Objectives
- Understand the principle of intraperiod tax allocation and identify the situations where it is necessary.