BU397 Lecture Notes - Lecture 12: Retained Earnings, Financial Statement, Disclose
Document Summary
Bu397- week 6, lecture 2: the effect of future tax rate changes should be immediately recognized on all deferred tax accounts, recorded as an adjustment to the deferred tax expense/benefit. If a tax loss still remains, carry it forward: tax loss carryforward, a tax loss carryforward can only be recognized if: It is more likely than not (i. e. , probable) that benefit will be realized (i. e. , company will generate taxable income in the future to apply loss against: to record the tax loss carryforward: Deferred tax benefit xx: to record the use of a recognized tax loss carryforward: Intraperiod tax allocation example: assume the following information for copy doctor inc. , tax rate of 25, a loss from continuing operations of ,000. Income from discontinued operations of ,000 (assume ,000 is not taxable: unrealized holding gain of ,000 on investment accounted for as fv-oci, prepare the journal entries to record deferred tax expenses. *taxable income of 690,000 x 25% = 172,500.
