Accounting for Deferred Income Taxes (2^nd Ed.)
AICPA Series

A complicated accounting model, FASB ASC 740 has been around for a while. But the rules are becoming more challenging as businesses become more complex. This book incorporates the new tax rates and other impacts of the Tax Cuts and Jobs Act and will assist you in understanding FASB ASC 740, Income Taxes, and how it establishes guidelines for accounting for income taxes, including income tax expense, classification of deferred tax accounts, and related disclosures.

Key topics include:

• Principles of FASB ASC 740
• Income tax expense and deferred tax liabilities and assets
• Valuation allowances
• Proper documentation of deferred income taxes in the work papers
• Required disclosures within the financial statements

Chapter 1 1-1

Theoretical Concepts of FASB ASC 740 1-1

FASB ASC 740 1-3

Temporary differences 1-11

Sources of taxable income 1-14

Determination of the valuation allowance 1-15

Special deductions 1-16

Accounting for uncertainty in income taxes 1-17

Intraperiod tax allocation 1-18

Financial statement presentation 1-19

Provisions of FASB ASC 740: Summary chart 1-21

Chapter 2 2-1

Temporary Differences 2-1

Identifying and measuring temporary differences 2-4

Case studies 2-18

Chapter 3 3-1

FASB ASC 740: Identifying Tax Differences and Deferred Tax Worksheet 3-1

Deferred tax assets 3-2

Tax planning strategies to assess the need for a valuation allowance for DTAs 3-4

Determination of the valuation allowance 3-8

Recognition of tax benefits for carrybacks and carryforwards 3-16

Computation worksheet to meet reporting and disclosure requirements of FASB ASC 740 3-24

Worksheet adapted to track deferred tax accounts 3-35

Case studies 3-43

Chapter 4 4-1

Accounting for Uncertainty in Income Taxes 4-1

Case studies 4-37

Appendix A Chapter 4, A-1

Chapter 5 5-1

Reporting and Disclosure Under FASB ASC 740: Theory and Examples 5-1

Separately issued financial statements 5-6

Components of income tax expense 5-8

Financial statement presentation 5-11

Disclosure requirements 5-13

Required disclosures for uncertain tax positions 5-15

Chapter 6 6-1

FASB ASC 740-20: Intraperiod Tax Allocation 6-1

Intraperiod tax allocation under FASB ASC 740—General considerations 6-5

Steps to allocate total tax expense 6-8

Summary 6-15

Case studies 6-16

Glossary Glossary 1

Index Index 1

Solutions Solutions 1

Chapter 1 Solutions 1

Chapter 2 Solutions 3

Chapter 3 Solutions 8

Chapter 4 Solutions 15

Chapter 5 Solutions 19

Chapter 6 Solutions 21

Bobby J. Carmichael, CPA, Ed.D (St. Augustine, FL) is a Professor Emeritus of Accounting at Texas A & M University where he taught all areas of financial accounting (principles, intermediate, and advanced), individual and advanced income taxation, cost (managerial) accounting, and microcomputer applications in accounting. He has articles that have been published on both financial accounting and taxation topics. He authored a manual for a certified public accounting examination review in taxation for many years and has also authored several continuing professional education manuals in taxation and income tax accounting. His current manuals for the AICPA are an intermediate and advanced course on accounting for income taxes.