[jp1101]

Hello,

I’m learning about temporary and permanent tax differences for the first time and would very much appreciate some help, I made a summary chart and was wondering if you guys could help me fill in the rest or let me know if I made a mistake. The column for future asset/liability is blank as I’m really not sure.

Thank you for your help.

add or subtract difference from book income? Temporary or permanent? Future asset or liability?

non deductible expense add P

non taxable revenue subtract P

sales revenue A/R (cash received from customer next period) subtract T

actual warrenty paid this year is lower than estimated $ add T

amortization expense > CCA add T

amortization expense < CCA subtract T

prepaid rent paid in cash > expense $ due this period subtract T

prepaid rent income received in cash > income earned add T

allowance for uncollectable accounts < actual add P

[Mamabear]

I can't remember, but this video may help you. https://www.youtube.com/watch?v=45PARid_erY&app=desktop

CPA Exam - Finally DONE (November 2014)
BEC (08/10/13) 80
AUD (08/24/13) 65 (11/13/13) 85
FAR (04/12/14) 81
REG (07/19/14) 69 (11/29/14) 87!!

[mkrohmer]

I think you'll be okay if you memorize this, works for me:

Financials INCOME 1st = tax LIABILITY

Return INCOME 1st = tax ASSET

Financials EXPENSE 1st = tax ASSET

Return EXPENSE 1st = tax LIABILITY

Just remember a few things:

-Only Temporary differences case a deferred tax asset/lia – Ignore permanent differences

-Current vs. Noncurrent: the asset/lia is classified the same as the related asset/lia that caused the difference (ex. if the difference is due to depreciation, caused by fixed assets, it will be noncurrent)

-all current assets and lia must be netted and all noncurrent assets and lia must be netted, meaning you will have separate line items showing the netted current and noncurrent amounts

-IFRS: classifies all deferred tax lia/asset as noncurrent

BEC - 83 (1/23/15)
FAR - 80 (4/3/15)
REG - 88 (5/14/15)
AUD - 81 (7/3/15)

[Author]

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