In: Accounting
"Calculating Current and Deferred Income"
There are six steps in calculating the current and deferred income tax expense or benefit components of a company’s income tax provision. Identify one of the six steps and describe the step in detail, explaining the issues that should be considered in that step and how it is computed.
(1) This six steps in calculating the current and deferred income tax expense are the folllowing.
(2) Benefit components of a company’s income tax provision.
Current income tax or benefit: represents income tax payable or
refundable in current year
Deferred income tax expense or or benefit: represents amount
necessary to adjust BS liabilities or rec for future inc tax pay or
refundable that results from current or prior year
transactions.
(3) The issues that should be considered in that step are the following.
changes in the valuation allowance for Deferred Tax Assets under U.S. GAAP