tailieunhanh - Lecture Intermediate accounting (16th edition): Chapter 19 - Kieso, Weygandt, Warfield
Chapter 19 - Accounting for income taxes. After completing this chapter you should be able to: Identify differences between pretax financial income and taxable income, describe a temporary difference that results in future taxable amounts, describe a temporary difference that results in future deductible amounts, explain the purpose of a deferred tax asset valuation allowance. | PREVIEW OF CHAPTER 19 Intermediate Accounting 16th Edition Kieso ● Weygandt ● Warfield Understand the fundamentals of accounting for income taxes. Identify additional issues in accounting for income taxes. LEARNING OBJECTIVES Explain the accounting for loss carrybacks and loss carryforwards. Describe the presentation of deferred income taxes in financial statements. After studying this chapter, you should be able to: Accounting for Income Taxes 19 LO 1 Corporations must file income tax returns following the guidelines developed by the Internal Revenue Service (IRS). Because GAAP and tax regulations differ in a number of ways, the amounts reported for the following will differ: income tax expense (GAAP). income tax payable (Internal Revenue Code). ACCOUNTING FOR INCOME TAXES LO 1 Tax Code Financial Statements Pretax Financial Income GAAP Income Tax Expense Taxable Income Income Taxes Payable Tax Return vs. LO 1 ACCOUNTING FOR INCOME TAXES Illustration: Chelsea, Inc. reported revenues of $130,000 and expenses of $60,000 in each of its first three years of operations. For tax purposes, Chelsea reported the same expenses to the IRS in each of the years. Chelsea reported taxable revenues of $100,000 in 2017, $150,000 in 2018, and $140,000 in 2019. What is the effect on the accounts of reporting different amounts of revenue for GAAP versus tax? LO 1 ACCOUNTING FOR INCOME TAXES Revenues Expenses Pretax financial income Income tax expense (40%) $130,000 60,000 $70,000 $28,000 $130,000 2018 60,000 $70,000 $28,000 $130,000 2019 60,000 $70,000 $28,000 $390,000 Total 180,000 $210,000 $84,000 GAAP Reporting Revenues Expenses Taxable income Income tax payable (40%) $100,000 2017 60,000 $40,000 $16,000 $150,000 2018 60,000 $90,000 $36,000 $140,000 2019 60,000 $80,000 $32,000 $390,000 Total 180,000 $210,000 $84,000 Tax Reporting 2017 ILLUSTRATION 19-2 ILLUSTRATION 19-3 Book vs. Tax Differences LO 1 Income tax expense (GAAP) Income tax payable (IRS) Difference Income tax . | PREVIEW OF CHAPTER 19 Intermediate Accounting 16th Edition Kieso ● Weygandt ● Warfield Understand the fundamentals of accounting for income taxes. Identify additional issues in accounting for income taxes. LEARNING OBJECTIVES Explain the accounting for loss carrybacks and loss carryforwards. Describe the presentation of deferred income taxes in financial statements. After studying this chapter, you should be able to: Accounting for Income Taxes 19 LO 1 Corporations must file income tax returns following the guidelines developed by the Internal Revenue Service (IRS). Because GAAP and tax regulations differ in a number of ways, the amounts reported for the following will differ: income tax expense (GAAP). income tax payable (Internal Revenue Code). ACCOUNTING FOR INCOME TAXES LO 1 Tax Code Financial Statements Pretax Financial Income GAAP Income Tax Expense Taxable Income Income Taxes Payable Tax Return vs. LO 1 ACCOUNTING FOR INCOME TAXES Illustration: Chelsea, Inc. reported .
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