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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
    • 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. 
    • 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. 
    • What to do when these items reverse in a future period.  
  • the balance sheet presentation of 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. 

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 After 2017
  2. Accounting for Permanent Differences Between Financial and Taxable Income After 2017

Learning Objectives

  • Identify what a temporary difference is and recognize how it is computed.
  • Identify what a deferred tax liability is and recognize how to compute the tax accrual for a temporary negative difference.
  • Identify what a deferred tax asset is and recognize how to compute the tax accrual for a temporary positive difference.
  • Recognize the proper financial statement presentation of temporary differences.
  • Discover what is recorded in the Valuation Allowance Account and when it is used.
  • Discover the proper financial statement presentation of temporary differences in the Tax Accrual footnote.
  • Identify what an uncertain tax position is and recognize its effect on the tax accrual.

 

 

Last updated/reviewed: March 15, 2019

28 Reviews (131 ratings)Reviews

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. <div class="italic orange margin-top-20">We have edited the videos in sections 3 and 4. Thank you for letting us know about the problem! &mdash; Proformative Editor</div>
5
Anonymous Author
The instructor made the learning of basic book-tax difference and UTP much simpler and easier to understand in this course.
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
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.
5
Member's Profile
Excellent overview about temporary differences, very useful examples and exercises
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
Anonymous Author
Easy to follow course with good examples to help you retain the information.
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.
4
Anonymous Author
A small refresher for internal auditors is always welcome
5
Anonymous Author
It was a good refresher course for a non-tax accountant
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

No advanced preparation or prerequisites are required for this course. Note: a subsequent course covers permanent differences and should be taken after completing this course.

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
  6:11Introduction to Accounting for Temporary Differences In Financial and Taxable Income
  19:52Book Tax Difference
  3:07Temporary Timing Differences
  7:07Deferred Tax Liability
  5:32Deferred Tax Asset
  5:51Valuation Allowance
  11:40Tax Disclosures in the Financial Statements
  7:33Uncertain Tax Position
  12:37Comprehensive Example
CONTINUOUS PLAY
  1:19:30Accounting 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