This course is the last segment in a three-part series that focuses on what would constitute a tax based on income. This segment is part two of our practical application segment to help the learner apply concepts reviewed in segment one – Introduction to ASC 740.  

ASC 740 deals with taxes based on income.  There are multiple concepts to examine when discussing ASC 740. This is part two in the series that focuses on these concepts. In this course we will review concepts such as valuation allowances, changes in tax rates, changes in entity tax status, evaluating income tax accounting for financial instruments and business combinations,  and accounting for uncertainty in income taxes.  

In general, when a tax is based on income, most items that enter into pretax accounting income enter into taxable income in the same year, and vice versa. Some events, however, are recognized for book purposes and tax purposes in different years. Over time, as these differences reverse, they eventually offset each other. The tax effects of these differences, referred to as deferred taxes, should be accounted for in the intervening periods. 

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.  

Who Should Attend: 

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

 

Learning Objectives
  • Discover the valuation allowances and sources of taxable income.
  • Identify when there is a change in valuation allowance.
  • Identify changes in tax laws and rates.
  • Recognize how to address changes of tax status in entity.
  • Identify income tax accounting for financial instruments.
  • Identify income tax accounting for business combinations.
  • Explore intra-period tax allocations.
  • Recognize the accounting for uncertainty in income tax.
Last updated/reviewed: August 10, 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
8 Reviews (46 ratings)

Reviews

4
Anonymous Author
I am a divisional controller so I don't get much experience on the tax side which is completed in our cooperate headquarters. This is the 3rd of Lynn's ASC 740 lessons that I have gone through. I am not a expert, but I have a much better understading.

5
Anonymous Author
This course did a great job building off the items covered in part 1. I enjoyed how it helped paint a picture of how to both calculate the taxes, but also how to make sure they're presented correctly.

5
Anonymous Author
I have really enjoyed this series of courses on ASC740. The material is presented in such a way that makes it easy to follow, and also understand the practical application.

5
Anonymous Author
Great overview of the excruciating detail involved in valuation for tax purposes. I'm saving the slides for future reference.

5
Anonymous Author
Practical application for accounting for income taxes based on income (part 2) is a helpful overview of AFIT

5
Anonymous Author
Great course. Nice walkthrough of ASC 740. Course materials were well put together.

5
Anonymous Author
This is a tough concept for me but the instructor did an excellent job

5
Anonymous Author
Good overview of deferred taxes. Good instructor.

Prerequisites
Course Complexity: Advanced

No advanced preparation or prerequisites are required for this course, However, it is recommended to take the other courses in the series prior to completing this one.

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 AND OVERVIEW
  Introduction to ASC 740 Part 2: Practical Application For Accounting for Income Taxes Based on Income4:12
  Valuation Allowances11:25
  Weighting of Available Evidence12:20
  Example ABC6:55
  Tax Rate and Law Changes3:15
  Changes in Tax Status6:40
  Tax Accounting for Financial Instruments5:00
  Tax Accounting for Business Combinations13:36
  Intra-Period Allocations10:09
  Summary 2:10
Continuous Play
  ASC 740 Part 2: Practical Application For Accounting for Income Taxes Based on Income1:15:42
Supporting Materials
  Slides: ASC 740 Part 2: Practical Application For Accounting for Income Taxes Based on IncomePDF
  ASC 740 Part 2: Practical Application For Accounting for Income Taxes Based on Income Glossary/IndexPDF
Review And Test
  REVIEW QUESTIONSquiz
 FINAL EXAMexam