Accounting for Deferred Income Taxes, 2nd Edition

Chapter 1Theoretical Concepts of FASB ASC 740

Learning objectives

• Recognize the theory of deferred taxes and how this theory can then be applied to practical situations.
• Identify the scope, objectives, or basic principles of FASB Accounting Standards Codification (ASC) 740, Income Taxes.
• Identify recognition and measurement of deferred taxes under FASB ASC 740.

Overview

In today’s reporting environment, it is important for the professional accountant to accurately and efficiently report the results of a company’s operation. A practical application worksheet approach is used that will aid in this process. There is no other area in accounting that is as far reaching and requires knowledge of as vast a number of topics in financial and tax accounting as accounting for deferred taxes. This course addresses the application of this complex standard to many common differences between financial accounting and tax compliance.

The Sarbanes-Oxley Act requires senior executives to attest to the extent and effectiveness of internal controls for financial reporting. The controls surrounding the tax function are a critical component of this compliance. Controls should be in place to provide timely and accurate information for all required data that is the basis for properly measuring a firm’s deferred tax asset (DTA) or deferred tax liability (DTL) and properly reporting this information ...