Accounting For Income Taxes & Accounting For Share-based Payments

Accounting For Income Taxes




Corporate Finance Institute®

, Session Objectives




Understand the difference Understand the difference Identify the circumstance
between accounting and taxable between carrying value and tax which taxable or deductib
income and perform a base of assets and liabilities and temporary differences ar
reconciliation between the two quantify each




Calculate temporary differences
and related deferred tax amounts
on the balance sheet




Corporate Finance Institute®

, Accounting Treatment of Income Taxes

Under both IFRS and US GAAP, income tax expense includes both current and deferred com




Income Tax Expense Current Tax Expense Deferred Tax Expen


The total amount The amount of tax due to The amount of tax due
included on the income the tax authorities in the the tax authorities in
statement for the period current period future periods




Corporate Finance Institute®

, Accounting Income Versus Taxable Income

A key element in determining income tax expense is understanding the difference between accoun
income and taxable income.




Accounting Income Taxable Income


• The profit or loss for a period before
deducting tax expense VS. • The profit or loss for a period
determined in accordance with rules
established by taxation authorities
• Income before tax on the income
statement for the period • Taxable Income on tax returns




Corporate Finance Institute®