This session will take the building block concepts learned in the ASC 740 Introduction Course and attach practical applications to the concepts. We use multiple examples and scenarios to explain the concepts.

NOTE – It is recommended that you view the course ASC 740 Introduction – Accounting for Taxes Based on Income prior to taking this course.

Even at a basic level, ASC 740 (previously FAS 109), Accounting for Income Taxes is a challenging pronouncement to master and apply in terms of preparing the corporate tax provision. ASC 740 addresses financial accounting and reporting for the effects of income taxes - federal, foreign, state and local - that result from an enterprise's activities during the current and preceding years. As a result of these efforts, companies are able to recognize current year taxes due or refundable and manage expected future tax consequences of deferred assets and liabilities.  

From terms and definitions to calculations and reporting, the financial accounting standard for calculating and reporting income tax provisions demands close attention. In part one of this series, we will examine some of the basic concepts to ensure practical application for accounting for income taxes based on income.  

All tax professionals that want a basic understanding of ASC 740/FAS 109 concepts and the tools to prepare basic tax provisions will benefit from this course. These concepts include  understanding entities impacted by ASC 740 and defining a “tax based on income”, examining discounting and reviewing concepts of changes in accounting estimates and errors along with temporary and permanent differences.

Who Should Consider This Course?

Business owners and operational professionals
Accountants and Finance professionals and Internal auditors
Tax and Legal professionals


Learning Objectives
  • Identify how to book temporary vs. permanent differences.
  • Discover how to apply the concept of deferred tax assets and deferred tax liabilities to scenarios.
  • Identify and applying uncertainty for income tax.
  • Recognize outlining concepts that are embedded in tax based on income.
  • Discover how to apply recognition and measurement issues to examples.
Last updated/reviewed: August 14, 2023

Included In Certifications

This course is included in the following Certification Programs:

18 CoursesFinancial Statement Preparation, Reporting and Auditing Certification

  1. Financial Statement Introduction
  2. GAAP Principles, Assumptions and Considerations
  3. GAAP Presentation of Financial Statements
  4. Management Discussion and Analysis (MD&A) Update
  5. Sarbanes Oxley Overview
  6. Sarbanes-Oxley Section 302: ICFR
  7. XBRL (Extensible Business Reporting Language) Introduction to Basics - Updated
  8. XBRL - Connection to SOX 302/404 and Critical Roles
  9. Analyzing Financial Ratios - Solvency, Liquidity and Debt
  10. Analyzing Financial Ratios - Leverage
  11. Analyzing Financial Ratios - Performance And Efficiency
  12. Financial Statement Audit in Accordance with GAAS - General Standards
  13. Financial Statement Audit in Accordance with GAAS - Conducting the Audit
  14. Financial Statement Audit in Accordance with GAAS - Auditors' Report and Opinion
  15. Introduction to Accounting for Income Taxes Based on Income
  16. Practical Application For Accounting For Income Taxes Based On Income Part 1
  17. Practical Application For Accounting For Income Taxes Based On Income Part 2
  18. FASB Codification Research System
13 Reviews (69 ratings)


Anonymous Author
I enjoyed the overview of ASC 740. This is something that is extremely difficult to keep track of for my company as I work for a global company with transactions all over the world that are processed in a variety of different systems. Before we can fully understand how to track it all, we need to understand the basics behind it. This course helps me better interact with out tax folks

Anonymous Author
She's effective for such a dry subject...just jumps in and goes through each item in detail. Tedious but have a good understanding.

Anonymous Author
Good foundation for AC 740 and good refresher if you haven't dealt with tax accounting recently. Thanks.

Anonymous Author
Great examples provided in this course that walk you through step-by-step in application of ASC704.

Member's Profile
Pretty straight forward course. I hate deferred taxes but this course explained things well.

Anonymous Author
I am not a tax expert, but this is a great intro for accounting for taxes and ASC 740.

Anonymous Author
I like the specific examples with calculations - great extension of the intro course.

Member's Profile
Very clear and concise explanation of complicated subject matter. P

Member's Profile
Lynn’s course on ASC 740 (Income Taxes)- Part 1 was well prepared

Anonymous Author
Good overview of accounting estimates vs errors. Good instructor.

Anonymous Author
I enjoyed this course and thought it was very informative.

Anonymous Author
A helpful refresher on accounting for income taxes (part 1)

Anonymous Author
This is a sometimes tough concept made simple. Thanks!

Course Complexity: Intermediate

No advanced preparation or prerequisites are required for 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 .
Instructor for this course
Course Syllabus
  Introduction to ASC 740 Part 1: Practical Application For Accounting for Income Taxes Based on Income3:28
  Purpose of Deferred Taxes8:43
  Temporary Differences 15:27
  Examples 2 and 3 of Temporary Differences8:17
  ASC 740 Examples of Temporary Differences8:09
  Permanent Differences 10:29
  Accounting Estimates vs Errors3:31
  Uncertainty in Income Taxes 6:35
  Summary 1:40
Continuous Play
  ASC 740 Part 1: Practical Application For Accounting for Income Taxes Based on Income1:07:08
Supporting Materials
  Slides: ASC 740 Part 1: Practical Application For Accounting for Income Taxes Based on IncomePDF
  ASC 740 Part 1: Practical Application For Accounting for Income Taxes Based on Income Glossary/IndexPDF
Review And Test