Types of temporary differences-financial statement, Financial Accounting

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.

Posted Date: 12/12/2012 12:38:49 AM | Location : United States







Related Discussions:- Types of temporary differences-financial statement, Assignment Help, Ask Question on Types of temporary differences-financial statement, Get Answer, Expert's Help, Types of temporary differences-financial statement Discussions

Write discussion on Types of temporary differences-financial statement
Your posts are moderated
Related Questions
LIMITATIONS O F FINANCIAL ACCOUNTING 1. Simply transactions which can be calculated in terms of money can be recorded in the books of accounts. Actions, though important t

1. Assume that the following data relative to Eddy Company for 2014 is available: Net Income $1,400,000 Transactions in Common Shares Change Cumulative Jan. 1, 2014, Beginnin

#define stock exchange? mention the SEBI guideline pertaining to the functioning of stock exchange? question..

ACCUMULATION ACCOUNTS FOR MINORS   (a) Income accumulations : When property is left in trust for minors, the income earned for the period will be divided equally or according t

Pre-acquisition losses in subsidiary company on date of acquisition If the subsidiary company has a loss on the date of acquisition i.e. a debit balance in the retained profits

Alyssa's Custom Cakes currently sells 5 birthday, 2 wedding, and 3 specialty cakes each month for $50, $150, and $100 each, respectively.. The cost of labor is $50 per hour includi

Since 1968, Dracula Limited has traded in Doncaster, South Yorkshire as a manufacturer of fancy-dress and theatrical costumes. It produces a wide range of general theatrical costum

What are main factors that Nor'easters should take into account in establishing a pricing policy? The minor revenue generators of Nor'easters include corporate sponsorships and

#The ABC Organization Unadjusted Trial Balance As of 31 December 2012 Account Codes Dr Cr Cash 10,789 Furniture and fixtures 60,000 Supplies inventory 8,531 Pledged contributions r

Explain the meaning of the terms "tangible" and "intangible" and discuss how these terms are used in describing assets.