BU397 Chapter Notes - Chapter 18: Deferred Tax, Deferred Income, Current Asset
Document Summary
Adjustments usually need to be made to the income reported on the fs when determining the income that is taxable under tax legislatiion. Accounting income per gaap taxable income per income tax act. Accounting income: known as income before taxes or accounting profit, creates income tax expense (current and deferred, referred to as the tax provision. Taxable income: is a tax accounting term that indicates the amount on which income tax payable is calculated, creates income tax payable and current income tax expense. If cash is received for services to be rendered in the future, it is recognized as revenue in taxable income when the cash is received. Should use the enacted rate at the balance sheet date: the rates that are expected to apply when the tax assets are realized or the tax liabilities are settled. The effect of deferred tax rate changes should be immediately recognized on all deferred tax accounts.
