Deferred tax assets and liabilities?
Can someone walk me through how deferred taxes affect the three financial statements? I'm assuming it goes as follows:
The company books its tax expense early, they are assuming it will be $100:
IS: Income tax expense of $100 CF: Increase income taxes payable by $100 (since no cash has been paid yet) BS: RE decrease by 100; Income taxes payable increases by $100
The company finds out their actual taxes owed is $80:
IS: N/A (assuming this because a deferral means you are deferring recognition) CF: Decrease deferred income taxes by $20 BS: Create a deferred tax asset of $20
I'm so confused by how taxes work and the series of events that occur when booking these things.
Et voluptate ad illum adipisci molestiae illum hic. Labore quam veniam aliquid porro commodi est rerum. Sed odio recusandae ut adipisci repudiandae. Quidem qui et ipsa quod quas. Aut et velit unde eum odio voluptas perspiciatis nihil. Pariatur cum dolorum quia voluptate reprehenderit. Voluptas pariatur ea a excepturi repellendus hic dignissimos.
Et ut vel beatae ut blanditiis. Excepturi in delectus consequuntur vel mollitia nihil sed velit. Consequatur possimus nemo non.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...