Types of temporary differences-financial statement, Financial Accounting

Assignment Help:

Types of temporary differences

There are two main types of temporary differences;

1) Taxable temporary difference:

If the carrying amount is more than the tax base then it means that this difference is taxable and the firm will end up paying some tax in the future. Therefore all taxable temporary differences lead to deferred tax liability.

2) Deductible temporary differences:

If the tax box is more than the carrying amount, then the firm will end up saving some tax in the future because the amounts due from the tax authorities will be deducted from the future taxes. Therefore, all deductible temporary differences will lead to deferred tax assets.


Related Discussions:- Types of temporary differences-financial statement

Hedge and a cash flow hedge, PC Bank has $100,000 in fixed rate loans payin...

PC Bank has $100,000 in fixed rate loans paying an annual interest rate of 10 percent, payable semiannually. PC Bank also has $100,000 in certificates of deposit. Their depositor

Prepare a post-closing trial balance, As a recently hired accountant for a ...

As a recently hired accountant for a small business, Bearing, Inc., you are provided with last year's balance sheet, income statement, and post-closing trial balance to familiarize

ACCOUNTING THEORY, HOW DOES ACCOUNTING THEORY INFLUENCE ACCOUNTING POLICY M...

HOW DOES ACCOUNTING THEORY INFLUENCE ACCOUNTING POLICY MAKING

Gathering Financial Information and Analysis, Many hospitals are classified...

Many hospitals are classified as not-for-profit (NFP). The presentation of for-profit (FP) financial statements differs in several respects from NFP accounting. You will probably w

Deferred tax assets and deferred tax liability, Below are excerpts from Saf...

Below are excerpts from Safeway's 2010 Annual Report, including its Consolidated Balance Sheets, a portion of Note E, Lease Obligations, and Note H, Taxes on Income, from the Notes

Personal financial specialist, Personal Financial Specialist (PFS) - CERTIF...

Personal Financial Specialist (PFS) - CERTIFIED PUBLIC ACCOUNTANT who specializes in PERSONAL FINANCIAL PLANNING and completes a series of requirements which compriseexperience, ed

The common stock of warner inc, The common stock of Warner Inc. is currentl...

The common stock of Warner Inc. is currently selling at $114 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share

Use spreadsheet to determine allocation, The Red and Blue partnership has b...

The Red and Blue partnership has been created to operate a law firm. The partners have been attempting to devise a fair system to allocate profits and losses. Red plans to work mor

Finance, defination of finance accounting

defination of finance accounting

Wilson wonders''s bonds, Wilson Wonders's bonds have 15 years remaining to ...

Wilson Wonders's bonds have 15 years remaining to maturity. Interest is paid yearly, the bonds have a $1,000 par value, and the coupon interest rate is 12%. The bonds sell at a pri

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd