Chapter 17

Accounting for Income Taxes

Lynne Glennon, CPA, MST

17.1 Accounting Recognition of Income Taxes

(a) Basic Problem

(b) Tax Recognition Concepts

(i) Development in the United States

(ii) Move to the Liability Method

(iii) Delay and Reconsideration

(iv) FASB Accounting Standards Codification

(c) General Approach to Recognition of Income Taxes and Exceptions

(i) General Approach to Recognition

(ii) Accounting for Uncertainty in Income Taxes

(iii) Valuation Allowance

(iv) Goodwill and Leveraged Lease Exceptions

(v) Transfers of Assets

(vi) Foreign Nonmonetary Assets

(vii) Other Special Areas

17.2 Applying FASB ASC 740

(a) Scope of FASB ASC 740

(b) Authoritative Literature

(i) Pre-Codification Authoritative Literature for Income Taxes

(ii) FASB Special Report

(iii) FASB Emerging Issues Task Force Discussions on Income Taxes

(c) Basic Objectives and Principles

(i) Temporary Differences

(ii) Annual Computation

(d) Recognition and Measurement

(i) Recognition of Deferred Tax Liabilities and Assets

(ii) Recognition of a Valuation Allowance

(iii) Recognition of a Change in the Valuation Allowance

(iv) Measurement of Deferred Tax Liabilities and Assets

(e) Special Applications

(i) Regulated Companies

(ii) Leveraged Leases

(iii) Business Combinations.4

(iv) Quasi Reorganizations

(v) Separate Financial Statements of a Subsidiary

(vi) Issues Addressed by the Emerging Issues Task Force

17.3 FASB ASC 740-10: Accounting for Uncertainty in Income Taxes

(a) Background

(b) Scope

(i) Consolidated ...

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