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

The time value of money , Calculate the present value and determine the npv...

Calculate the present value and determine the npv, Financial Management. Assume today is 3 December 2009. Helen is 30 years old and has a Bachelor of Business. She is currently em

Prepare three years of monthly cash budgets for company, 1. Prepare three y...

1. Prepare three years of monthly cash budgets, yearly income statements, and yearly balance sheets for the jewelry business Daisy & Company. General Information: 1. Th

Adjudication order-adjudication of debtor, Adjudication order The court...

Adjudication order The court may adjudge the debtor bankrupt on the application of the O.R. or any creditor in the following cases: If the creditors so resolve at their first

What is capital gain, Q. What is Capital Gain? Capital Gain - Portion o...

Q. What is Capital Gain? Capital Gain - Portion of total GAIN recognized on the sale or exchange of a no inventoryasset that isn't taxed as ORDINARY INCOME. Capital gains have

Montana''s capital lease, Montana Company signs a five-year capital lease w...

Montana Company signs a five-year capital lease with Elway Company for office equipment. The yearly lease payment is $20,000, and the interest rate is 8%.   1. Compute the cu

Protective Trusts-secret trusts-trusts laws and accounts, PROTECTIVE TRUSTS...

PROTECTIVE TRUSTS The income of property may be settled on such terms as to restrict its availability to creditors of the beneficiary in the following ways: (a) Determinable

Analysis of potential arrangement with supplier, At current the working cap...

At current the working capital cycle is Receivables days $0.4m/$10m * 365 = 15 days Inventory days $0.7m/$8m * 365 = 32 days (cost of sales = $10m - $2m) Payables days $1.

Margin movement, A quick glance at the trend in the Operating and Net Profi...

A quick glance at the trend in the Operating and Net Profit Margin figure indicates an improvement in the margins over the 2 year period. As is evident from the graph above HAIL du

Interest revenue, Interest revenue: At the end of 2012, a manufacturer...

Interest revenue: At the end of 2012, a manufacturer sells machinery to a customer for $90,000. $30,000 is paid immediately, and the customer signs a promissory note for the r

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