Accounting for Income Taxes：所得税会计.ppt

Environment and Theoretical Structure of Financial Accounting Accounting for Income Taxes Objectives of the Chapter To learn the permanent difference between the financial income and taxable income. To learn the temporary difference between the financial income and taxable income. To learn the accounting treatment for the temporary difference and permanent difference. Permanent Difference versus Temporary Difference Permanent Difference: A difference between financial income and taxable income in an accounting period that will never be reversed in later accounting periods. This difference does not require an interperiod tax allocation. Permanent Difference versus Temporary Difference (contd.) Examples of Permanent Difference 1. Revenue recognized for F/R (financial report) but not taxable. a. Interest on municipal bonds. b. Life insurance proceeds payable to a corporation upon the death of an insured employee Permanent Difference versus Temporary Difference (contd.) Examples (contd.) 2. Expense recognized for F/R but not tax deductible: Life insurance premium paid for employees. 3. Expense is tax deductible but not recognized for F/R purpose: Percentage depletion in excess of Cost Depletion. Permanent Difference versus Temporary Difference (contd.) Temporary Difference: A difference between a taxable income and a financial income in an accounting period that will be reversed in later accounting periods. This difference requires an intertperiod tax allocation. Causes of Temporary Difference: Different treatment between GAAP and IRC Difference between IRC and GAAP Depreciation GAAP: any systematic depr. method IRC : ACRS or MACRS Installment Sales (future taxable) GAAP: on accrual basis IRC : on cash basis Difference between IRC and GAAP (contd.) Warranty Expense (future deductible) GAAP: accrual basis (estimated and recognized at the end of each period) IRC : cash basis (tax deductibl