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

Maturity risk premium , The real risk-free rate is 2%. Inflation is expecte...

The real risk-free rate is 2%. Inflation is expected to be 2% this year and 5% during the next 2 years. Suppose that the maturity risk premium is zero. What is the yield on 2-ye

Book:accounting research, Read Appendix B, "Sample Brief Memorandum," that ...

Read Appendix B, "Sample Brief Memorandum," that starts on page 193 of the textbook. In 2-3 pages (12 point font, double spaced), critique the memorandum based on what we've learne

What is financial risk when company experiencing changes, Financial risk is...

Financial risk is the likelihood of a company experiencing changes in the level of its distributable earnings as a result of the need to make interest payments on debt finance or p

Sales volume reaches the maximum capacity, Sales volume reaches the maximum...

Sales volume reaches the maximum capacity of the new machine in Year 4. The positive NPV point to that the investment in Machine Two is financially acceptable althoug

Show the management report, Q. Show the Management Report? Management's...

Q. Show the Management Report? Management's Report - Management is essential to include in its annual report its assessment of the effectiveness of the company's internal contr

Dividends in arrears on cumulative preferred stock, Q. Dividends in arrears...

Q. Dividends in arrears on cumulative preferred stock a. are shown in stockholders' equity of the balance sheet. b. must be paid before common stockholders can receive a dividend.

Need help completing self assessment return, I am an AAT student studying l...

I am an AAT student studying lvl 3 AAT at college. I wish to learn how to complete self assessment end of year tax return forms for other people. That is because I have already bee

Case Study, I have a case study due in one of my classes. There are 3 pages...

I have a case study due in one of my classes. There are 3 pages of information about the company in the case, and there are 12 questions I must complete. Each question is basically

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