The following are common items that are treated differently for financial reporting purposes than they are for tax purposes:
1. The excess amount of a
charge to the accounting records (allowance method) over a charge to the tax
return (direct writeoff method) for uncollectible receivables
2. The excess amount of
accrued pension expense over the amount paid
3. The receipt of dividends
from a taxable Canadian corporation that are treated as income for accounting
purposes but are not subject to tax
4. Expenses incurred in
obtaining tax-exempt income
5. A trademark that is
acquired directly from the government and is capitalized and amortized over
subsequent periods for accounting purposes and expensed for tax
purposes
6. A prepaid advertising
expense that is deferred for accounting purposes and deducted as an expense for
tax purposes
7. Premiums paid on life
insurance of officers (where the corporation is the
beneficiary)
8. A penalty paid for filing
a late tax return
9. Proceeds of life
insurance policies on lives of officers
10. Restructuring costs that
are recognized as an unusual item on the income statement and are not deductible
until actual costs are incurred
11. Unrealized gains and
losses that are recognized on investments recorded as FV-NI or FV-OCI and are
not taxable or deductible until realized for tax purposes
12. Excess depletion for
accounting purposes over the amount taken for tax purposes
13. The estimated gross
profit on a long-term construction contract that is reported in the income
statement, with some of the gross profit being deferred for tax purposes
Instructions
(a) Indicate for each item
above if the situation is a permanent difference, or a reversing difference
resulting in a temporary difference.
(b) Indicate for each item
above if the situation will usually create future taxable amounts, resulting in
a future tax liability; or future deductible amounts, resulting in a future tax
asset; or whether it will have no future tax implications.
|
|
(a) |
|
(b) | ||
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13. |
|
Reversing
diff.
Reversing diff.
Permanent
diff.
Permanent
diff.
Reversing
diff.
Reversing
diff.
Permanent
diff.
Permanent
diff.
Permanent
diff.
Reversing
diff.
Reversing
diff.
Reversing
diff.
Reversing
diff. |
|
Future
deductible amounts
Future
deductible amounts
No effect on
future tax returns
No effect on
future tax returns
Future taxable
amounts
Future taxable
amounts
No effect on
future tax returns
No effect on
future tax returns
No effect on future tax returns
Future deductible amounts
Unrealized
gains: future taxable
amounts
Holding/unrealized losses: future deductible
amounts
Future
deductible amounts
Future taxable
amounts |
|
Future tax
asset
Future tax
asset
No future
taxes
No future
taxes
Future
taxliability
Future tax
liability
No future
taxes
No future
taxes
No future
taxes
Future tax
asset
Future tax
liability
Future tax
asset
Future tax
asset
Future tax
liability |
No comments:
Post a Comment