What are some categories of deferred tax assets on the 10k

Expert Solution

Deferred tax assets are recognized for temporary differences that will result in deductible amounts in future years.

A deferred tax asset originates when an expense is recognized under GAAP and has not yet been recognized for tax purposes, or when revenue is recognized for tax purposes and has not yet been recognized under GAAP. The deferred tax asset will reverse when the expense, already recognized under GAAP, is finally recognized for tax purposes, or when revenue, already recognized for tax purposes, is finally recognized under GAAP.

For example, GAAP rules require that warranty costs be estimated and expensed in the same period the good under warranty is sold and the revenue is recognized. Under tax rules, warranty costs are deductible only when incurred, and may not be estimated and deducted in advance. This will mean that for any given sale, warranty expense under GAAP rules will be recognized before it is recognized for tax purposes.

Some of the categories of deferred tax asset

Deferred tax assets:

Depriciation (Straight Line V/s MACRS)

Allowance for credit losses

Restructure/Revaluation reserves

Incentive compensation

Others

ekkarill92 answered 1 year ago

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What are some categories of deferred tax assets on the 10k

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