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

Sunk cost and opportunity cost., In the NPV analysis, sunk cost is not rele...

In the NPV analysis, sunk cost is not relevant whereas opportunity cost is for project evaluation. Requirements: Describe and justify the above statement about sunk cost an

Calculate interest rate , As a borrower, which of the following two 30 year...

As a borrower, which of the following two 30 year, monthly payment loans would you choose (and why) if you had a 10 year expected payment horizon: 5% interest rate with 3.5 points,

Leverage or gearing ratios, Leverage or Gearing Ratios - These ratios inc...

Leverage or Gearing Ratios - These ratios include the Long Term Debt to Equity Ratio, Total Debt to Equity Ratio, Interest Coverage Ratio. Here, the interest coverage ratio is al

Partnership and sole trader, what are the advantage and disadvantage to mr ...

what are the advantage and disadvantage to mr fish, mr Lobster of forming a partnership rather than a close corporation or a company?

Help, I need help with my homework

I need help with my homework

Earn profit or incurred loss , Assure  you have just  started a Mobile sto...

Assure  you have just  started a Mobile store. You sell mobile sets and  currencies of Airtel, Vodaphone, Reliance and BSNL.  Take five transactions  and prepare a position stateme

Bond''s amortization, On January 1, 2010, Solis Co. issued its 10% bonds in...

On January 1, 2010, Solis Co. issued its 10% bonds in the face amount of $3,000,000, which mature on January 1, 2020. The bonds were issued for $3,405,000 to yield 8%, resulting in

Ideal minority interest, IDEAL MINORITY INTEREST The minority interest id...

IDEAL MINORITY INTEREST The minority interest ideally is entitled to the profit after tax in minority interest. However due to consolidation, the profits of the subsidiary compan

Fixed interest securities-accounts under trustee , Fixed Interest Securitie...

Fixed Interest Securities No advice in writing is required before an investment in fixed interest securities is made. Government Securities. Treasury Bills. Fixed

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