44   ASC 740 INCOME TAXES

Perspective and Issues

Subtopics

Scope and Scope Exceptions

Overview

Definitions of Terms

Concepts, Rules, and Examples

Evolution of Accounting for Income Taxes

Simplified example of interperiod income tax allocation using the liability method

ASC 740 in Greater Detail

Temporary and Permanent Differences

Temporary differences

Temporary differences from share-based compensation arrangements

Temporary differences arising from convertible debt with a beneficial conversion feature

Permanent differences

Treatment of Net Operating Loss Carryforwards

Example—Net operating loss carryforwards and income tax credit carryforwards

Measurement of Deferred Income Tax Assets and Liabilities

Scheduling of the reversal years of temporary differences

Determining the appropriate income tax rate

Computing deferred income taxes

Computation of deferred income tax liability and asset—Basic example

The Valuation Allowance for Deferred Income Tax Assets Expected to Be Unrealizable

Establishment of a valuation allowance

Example of applying the more-likely-than-not criterion to a deferred income tax asset

Impact of a qualifying tax strategy

Accounting for Uncertainty in Income Taxes

Background

Initial recognition and measurement

Example of the two-step initial recognition and measurement process

Interest

Penalties

Subsequent recognition, derecognition, and measurement

Classification

Applicability to business combinations

The Effect of Tax Law Changes on Previously Recorded Deferred ...

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