AFM391 Chapter Notes - Chapter 18: Debits And Credits, Datagram Transport Layer Security, Deferred Tax

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Corporations file income tax returns following the income tax act, which is administered by the canada. Pre-tax income on the income statement usually differs from a company"s taxable income. Hence, income tax expense does not equal income tax payable. Accounting income or accounting profit is a financial reporting term that represents income before taxes, determined according to ifrs or aspe and is measured with the objective of providing useful information to investors and creditors. Taxable income or taxable profit is a tax accounting term and indicates the amount on which income tax payable is calculated; determined according to the income tax act (ita) and. Regulations, which are designed to raise money to support government operations. Only affects the period in which they occur; no deferred tax consequences. Situations 1 to 4 are known as reversible differences or timing differences. Accounting and tax treatment are the same, but timing of when they are included differs.

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