BUS 321 Lecture Notes - Lecture 18: Pension, Net Operating Loss, Revenue Recognition

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 321
• Professor: simonsuwanyangyuan

Document Summary

As tax regulations and generally accepted accounting principles differ in many ways, taxable income and accounting income frequently differ. Taxable income is computed in accordance with prescribed tax regulations and rules, whereas accounting income is measured in accordance with. Add / deduct differences between accounting and tax. Taxable income xx xx xx (accordance with gaap guidelines) (cid:894)be used to (cid:272)al(cid:272)ulate (cid:862)current(cid:863) tax to (cid:271)e paid(cid:895) Differences between taxable income and accounting income can be categorized as: Temporary differences arise when the tax basis of an asset or liability and its reported amount in the financial statements differ. Proceeds from life insurance on key executives; Warranty costs recognized in the same period as the sale for matching purposes for the financial statements and recognized as the warranty work is performed for tax purposes. Amortization computed on a straight-line basis for financial reporting purposes and on an accelerated basis for tax purposes;