Asked by Andrea Madison on May 20, 2024
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Book income tax expense could equal current taxes payable to the IRS plus the increase in deferred tax liabilities minus the increase in deferred tax assets.
Deferred Tax Liabilities
Future tax payments a company owes but has not yet paid, often arising from timing differences between accounting practices and tax laws.
Deferred Tax Assets
Deferred tax assets are items on the balance sheet that reduce future tax obligations because of overpayment or advance payment of taxes or future tax benefits due to allowable temporary differences.
Book Income Tax Expense
The amount of income tax expense that is reported on the financial statements, which may differ from the actual tax paid due to differences between accounting and tax rules.
- Become proficient in the basics of income tax expense calculation relevant to financial statements.
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Learning Objectives
- Become proficient in the basics of income tax expense calculation relevant to financial statements.
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