Interperiod income tax allocation procedures are appropriate when A. an extraordinary loss will cause the amount of income tax expense to be less than the tax on ordinary net income. B. an extraordinary gain will cause the amount of income tax expense to be greater than the tax on ordinary net income.
Interperiod tax allocation results in a deferred tax liability from A. an income item partially recognized for financial purposes but fully recognized for tax purposes in any one year.
Renner Corporation's taxable income differed from its accounting income computed for this past year. An item that would create a permanent difference in accounting and taxable incomes for Renner would be A. a balance in the Unearned Rent account at year end.
An interperiod tax allocation is the temporary difference between the effects of tax policy on the financial reporting of a business and its normal financial reporting as mandated by an accounting framework, such as GAAP or IFRS.
The reason for using intraperiod tax allocations is to improve the quality of information presented to the readers of a company's financial statements. For example, ABC International records a gain of $1 million. Its tax rate is 20%, so it reports the gain net of taxes, at $800,000.
A result of inter-period tax allocation is that: The income tax expense in the income statement is the sum of the income taxes payable for the year and the changes in deferred tax assets or liability balances for the year.
A temporary difference exists because depreciation deduction for tax purpose and financial reporting purpose. Which of the following differences between financial reporting tax reporting creates ordinarily a deferred tax liability?
two setsUnderstanding Comprehensive Tax Allocation As mentioned, comprehensive tax allocation is also known as interperiod tax allocation, which is a reference to the two sets of reporting periods that firms use in accounting.
Operating income is not one of the categories of income subject to intra-period income tax allocation.
Allocation, in this case, means to assign income to the state you were living in when you earned it. We'll either ask you to separate the income you earned or to verify the allocation amounts we already calculated for you. Allocating your income shouldn't be too difficult, but it can involve some math.
intraperiod (not comparable) Within a single period.
Which of the following is a required disclosure in the income statement when reporting the disposal of a component of the business? Earnings per share from continuing operations, discontinued operations, and net income should be disclosed on the face of the income statement.
Which of the following causes a permanent difference between taxable income and pretax accounting income? Interest income on municipal bonds. In reconciling net income to taxable income, interest earned on municipal bonds is: A permanent difference.
(d) The requirement is to identify the correct statement about the presentation of deferred tax assets and liabilities under IFRS. Answer (d) is correct because deferred tax assets are netted against deferred tax liabilities if they relate to the same taxing authority.
Correct Answer: Option (A) (I) Accrual for product warranty responsibility and (II) subscriptions received in advance are two examples of transient differences that result in a deferred tax asset in the year they occur.