Question

If discounting is used in the area of deferred tax assets and liabilities, is there any...

If discounting is used in the area of deferred tax assets and liabilities, is there any particular difficulty relative to tax loss carryforwards?

Homework Answers

Answer #1

The deferred tax assets and liabilities arises due to the timing difference in the taxation. The main problem with the deferred tax assets is how to deal with the timing difference i.e., how to present the valuing in case of tax losses in future and how to carry forward the loss in future. Thus it is very difficult situation.

According to the studies by taking into account of current year tax payments and increase in deferred taxes are better way of taxation for succeding years than just using preceeding years tax payments. Thus if discounting were used in this area, they would be difficulty in the loss carryforwards.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The FASB requires that deferred tax assets and liabilities not be discounted. In at least three...
The FASB requires that deferred tax assets and liabilities not be discounted. In at least three paragraphs, support the position presented below. Position #1:  Present arguments in favor of discounting deferred tax liabilities.
Permanent differences impact a) current deferred taxes. b) current tax liabilities. c) deferred tax assets. d)...
Permanent differences impact a) current deferred taxes. b) current tax liabilities. c) deferred tax assets. d) deferred tax liabilities.
Brady's listing of deferred tax assets and liabilities includes the following for operations in the tax...
Brady's listing of deferred tax assets and liabilities includes the following for operations in the tax jurisdictions of Tambura and Nileboo: Tambura: Deferred tax asset of $22 million Valuation allowance of $19 million Deferred tax liability of $31 million Nileboo: Deferred tax asset of $69 million Deferred tax liability of $20 million Brady files separate tax returns in Tambura and Nileboo. Brady’s balance sheet would include the following disclosure of deferred tax assets and liabilities: Multiple Choice A A deferred...
explain why deferred tax assets and liabilities are recognized and reported on a corporation’s balance sheet
explain why deferred tax assets and liabilities are recognized and reported on a corporation’s balance sheet
When enacted tax rates change and a company has existing deferred tax liabilities or assets based...
When enacted tax rates change and a company has existing deferred tax liabilities or assets based on the previous tax rates, one accounting effect that results from the change in tax rates Question 1 options: nothing; rate changes should be ignored. is a gain or loss on tax rate change. is a credit to income taxes payable. is a debit or credit to income tax expense. Ajax Corporation had taxable income of $12,000 during 2020. Ajax used MACRS for tax...
If Deferred Tax Assets are long-term liabilities that have a habit of sticking around for a...
If Deferred Tax Assets are long-term liabilities that have a habit of sticking around for a very long time, do they feel like debt to the IRS? Or do they feel more like equity?
Curry Co. has several deferred tax balances on their balance sheet; $100,000 deferred asset retaled to...
Curry Co. has several deferred tax balances on their balance sheet; $100,000 deferred asset retaled to bad expense; $600,000 deferred tax liability related to depreciation; $200,000 deferred tax asset related to a new operating loss, which is expected to reverse in the next 12 months. What categories of deferred tax assets/liabilites will the Company have on its balance sheet? ?A. Current deferred tax assets ?B. Non Current deferred tax assets ?C. Current deferred ta assets and non current deferred tax...
Please explain how accountants are expected to address uncertainty in whether deferred tax assets can be...
Please explain how accountants are expected to address uncertainty in whether deferred tax assets can be used in the future affect income tax expense.
Analyzing and Interpreting Tax Footnote Under Armour, Inc. reports total tax expense on its income statement...
Analyzing and Interpreting Tax Footnote Under Armour, Inc. reports total tax expense on its income statement for year ended December 31, 2010 of $40,442 and cash paid for taxes of $38,773. The tax footnote in the company's 10-K filing, reports the following deferred tax information. Deferred tax assets and liabilities consisted of the following (in thousands): December 31 ($ thousands) 2010 2009 Deferred tax assets State tax credits, net of federal tax impact $ 1,750 $ -- Tax basis inventory...
Adams Corporation has total deferred tax assets of $3,000,000 at year-end. Management is assessing whether a...
Adams Corporation has total deferred tax assets of $3,000,000 at year-end. Management is assessing whether a valuation allowance must be recorded against some or all of the deferred tax assets. What level of assurance must management have, based on the weight of available evidence, that some or all of the deferred tax assets will not be realized before a valuation allowance is required?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT