BALANCE SHEET APPROACH

ASC 740 is based on a balance sheet approach to accounting for income taxes on past and current income reported in the financial statements. Essentially the Company reports three components of income tax expense on its worldwide income in its financial statements:
 

  1. Income taxes currently payable or refundable, often referred to as the current payable or receivable, is the amount of income tax expected to be incurred related to the company’s income tax returns for the reporting period. The related income statement impact is referred to as the current expense or current benefit accordingly.
     

  2. Deferred tax assets and deferred tax liabilities, are the anticipated future tax consequences arising from activity in past or current reporting periods. Deferred tax assets and liabilities represent basis differences between the book value and tax value of the underlying items. The related income statement impact is referred to as the deferred tax benefit or deferred tax expense accordingly.
     

  3. Noncurrent Payable, is associated with uncertain tax benefits which will be covered later.

ASC 740 In Depth: States 

This complimentary ASC 740 webinar is an in depth discussion of state income taxes under ASC 740.

ASC 740 Training Corporate Income Tax Ra
ASC 740 In Depth: States 

This complimentary ASC 740 webinar is an in depth discussion of state income taxes under ASC 740.

30 minutes

ASC 740 In Depth Valuation Allowances

This complimentary ASC 740 webinar is an in depth discussion of valuation allowances under ASC 740 including evaluating positive and negative evidence, impacts on the tax rates and  interim implications.

30 minutes

BALANCE SHEET APPROACH

ASC 740 is based on a balance sheet approach to accounting for income taxes on past and current income reported in the financial statements. Essentially the Company reports three components of income tax expense on its worldwide income in its financial statements:
 

  1. Income taxes currently payable or refundable, often referred to as the current payable or receivable, is the amount of income tax expected to be incurred related to the company’s income tax returns for the reporting period. The related income statement impact is referred to as the current expense or current benefit accordingly.
     

  2. Deferred tax assets and deferred tax liabilities, are the anticipated future tax consequences arising from activity in past or current reporting periods. Deferred tax assets and liabilities represent basis differences between the book value and tax value of the underlying items. The related income statement impact is referred to as the deferred tax benefit or deferred tax expense accordingly.
     

  3. Noncurrent Payable, is associated with uncertain tax benefits which will be covered later.

ASC 740 In Depth: States 

This complimentary ASC 740 webinar is an in depth discussion of state income taxes under ASC 740.

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