Accounting for Temporary Differences in Taxable Income

Course details

Although a majority of income and deduction items encountered by a business enterprise are treated identically for financial reporting and tax purposes, there are numerous items that are treated differently.  They are known as book-tax differences and are classified as either temporary or permanent. 

This course covers temporary differences, including:

• How to identify and account for temporary differences.
  • an income/expense book-tax difference relating to financial income that will be recognized in the future is known as a deductible temporary difference creating a deferred tax asset. 
  • an income/expense book-tax difference relating to taxable income that will be recognized in the future is known as a taxable temporary difference creating a deferred tax liability. 

• The balance sheet presentation of the deferred tax assets and deferred tax liabilities arising from these transactions.

• How to prepare the journal entry to record the income tax expense (also called the income tax provision) including the deferred tax benefit/liability due to book-tax differences. 
  • What to do when these items reverse in a future period. 

If you would like Continuing Education Credit (e.g. CPE, CE, CPD, etc.) for this course, it is available if you take this course on the Illumeo dot com platform under course title: Accounting for Temporary Differences In Financial and Taxable Income. Illumeo is certified to provide CPE in over two dozen different professional certifications covering finance, accounting, treasury, internal audit, HR, and more. However, in order to receive CPE credit the courses must be taken on an 'approved-by-the-governing-body' CPE platform, and for over two dozen corporate professional certifications, that is the Illumeo platform. Go to Illumeo dot com to learn more.