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发表于 2011-7-11 17:41
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future deductible benefit = DT Asset
future taxable amount = DT Liability
***DTL***
so you recognize the revenue on your financial statements in 2010, but NOT on your tax return until 2011:
Taxable temporary difference - definition: a temp difference that results in taxable amounts in the future. application: in 2010 revenue of $1,000 is recognized for FINANCIAL REPORTING purposes, but is being deferred for tax purposes (like an accrued revenue resulting in an accounts receivable). When this receivable is recovered in the next year (2011), the $1,000 will appear on the tax return and the temp difference will give rise to a taxable amount of $1,000. (note this is not the amount of the tax liability, just the amount to be taxed).
Deferred tax liability - definition: the deferred tax consequence attributable to taxable type temporary differences. application: the taxable temporary difference of $1,000 will cause an increase of $400 (40% tax rate * 1,000) in income taxes payable in the future when the related taxable amount (the $1,000) is reported on the TAX RETURN. Therefore, the $400 deferred tax liability is to be reported in the 2011 year balance sheet.
Deferred tax expense - definition: an increase in a deferred tax liability or a reduction in a deferred tax asset during the period. application: the increase of $400 in 2010 in the deferred tax liability account on the balance sheet results in a deferred tax expense of $400 on the income statement for 2010. This makes sense because you pay taxes on the revenues you reported in 2010 although you got no cash, and it all went into accounts receivable and is NOT reported on the tax return.
end of DTL.
***DTA***
Let's assume that you had established an expense item (a payable) in 2010 and you actually pay it in 2011:
Deductible temporary difference - definition: a temp diff that results in deductible amounts in future years when the asset or liability is recovered or settled, respectively. application: an _expense_ (notice difference from DTL) of $2,000 is being recognized for FINANCIAL REPORTING purposes but is not reported for tax purposes. so your taxable income was reduced because you showed less earnings, but in reality you did not pay this tax - so you create an asset account that you can later reduce when you actually have to pay the taxes! A deductible amount of $800 (2,000 * .4) will appear on the 2011 financial statements, when the amount hits the tax return. This makes sense because you already paid the tax last year, so now you can deduct it.
Deferred tax asset - definition: the deferred tax consequence attributable to deductible type temp differences and loss carry-forwards. (if you have a loss, you can carry forward the tax benefit for 30 years). application: the deductible temp diff of $2,000 will cause a decrease of $800 in taxes payable in the future when the related amount is reported on the 2011 tax return. Therefore, a deferred tax asset is reported on the balance sheet at the end of 2010.
Deferred tax benefit - definition: an increase in the deferred tax asset or a reduction in the deferred tax liability during the period. application: the increase of $800 during 2010 in a deferred tax asset account on the balance sheet results in a deferred tax benefit of $800 on the income statement for 2010. This makes sense because you have payed out less in taxes, according to your financial statements, and you take this tax "gain" and put it in an asset account that you can use to reduce your income taxes in the year you actually recognize it in the tax return (2011).
hope this helps.. |
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