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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. 

 

Note:  a subsequent course on Illumeo covers permanent differences and should be taken after this course has been completed.

Course Series

This course is included in the following series:

2 CoursesAccounting for Differences in Financial and Taxable Income

  1. Accounting for Temporary Differences In Financial and Taxable Income
  2. Accounting for Permanent Differences In Financial and Taxable Income

Learning Objectives

  • Identify what is a temporary difference and how is it computed.
  • Identify what is a deferred tax asset
  • Identify what is a deferred tax liability:
  • Recognize the proper financial statement presentation of temporary differences.
Last updated/reviewed: January 28, 2018

23 Reviews (105 ratings)Reviews

4
Member's Profile
Good refresher and pretty good examples. Not sure I was clear on a few of the questions in review and final exams
4
Member's Profile
This would be a better course if there wasn't seemingly duplication of the recorded material. It appears that sections 3 and 4 both have their content repeated, making them unnecessarily twice as long. The presenter was good and the topic is not an easy one to convey.
We have edited the videos in sections 3 and 4. Thank you for letting us know about the problem! — Proformative Editor
5
Member's Profile
Cherie provides great examples that allow you to easily digest the tax principles beyond just theory.
5
Member's Profile
A good overview on the handling of Financial and taxable income, and how they should be reported.
5
Member's Profile
Good coverage of relevant tax topics. It would have been beneficial to have more case studies.
5
Anonymous Author
This was a great refresher course on deferred tax assets and deferred tax liabilities.
4
Member's Profile
Some slides duplicated. Course should be edited to exclude duplicate slides.
4
Member's Profile
Good examples to help understand the concepts and clear slides and materials.
4
Anonymous Author
Very good distillation of a somewhat complex area. Easy to follow. Thanks!
5
Member's Profile
VERY thorough review. I will be taking more classes from Cherie.
4
Anonymous Author
I found this course to be very informative. Great examples.
Anonymous Author
Good review and case examples, helps to refresh material.
5
Anonymous Author
The examples were simple and understandable. Thanks!
4
Anonymous Author
Great introduction to book tax differences!
5
Anonymous Author
Very informative and easy to follow.
5
Anonymous Author
Very informative
4
Anonymous Author
Good review.
5
Member's Profile
Great course!
4
Anonymous Author
valued course
4
Anonymous Author
Good course.
5
Anonymous Author
good class.
4
Member's Profile
Good
3
Member's Profile
!

Prerequisites

Course Complexity: Intermediate

Prerequisite: Exposure to accounting for income taxes

 

Advanced Preparation: None

 

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
Accounting for Temporary Differences
  8:46Source of Book Tax Differences
  21:11Liability Method and Depreciation
  9:49Tax Disclosures In The Financial Statements
  10:21Uncertain Tax Position and Case Study
CONCLUSION
  3:18Course Conclusion
Continuous Play
  1:07:10Accounting for Temporary Differences In Financial and Taxable Income
SUPPORTING MATERIALS
  PDFSlides: Accounting for Temporary Differences
  PDFAccounting for Temporary Differences Glossary/Index
REVIEW & TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM