The balance sheet liability method with the income statement liability method of accounting for income taxes compared to explore

Abstract: based on old and new debt for same on the accrual basis of tax effect accounting method, the inherent commonality; but based on the assets and liabilities based on the concept of law and the establishment of new debt expense in the income concept based on the method compared to the old debt in accounting for the object, accounting procedures, are clearly distinguished on the subject set, which covers a variety of temporary differences not timing differences include differences in areas that can be reversed, underscores the advantages of the new law of obligations.

Keywords: balance sheet; income statement; debt law;

New income tax accounting standards, accounting standards is a significant change in the system one of the criteria. To understand the old and new income tax accounting treatment, in particular, are two distinct liability method of accounting separation and heritage links to help people better understand the new accounting method of accounting characteristics of the advantages of changing the mindset, to better achieve the convergence of old and new systems transformation.
One or two common characteristics with the liability method based on the cash basis of accounting the tax payable method, based on different, the two methods are both based on debt accrual basis of tax effect accounting method, with the inherent commonality.
(A) Income tax expense income statement in line with the principle of matching the two methods are payable for the current income tax expense on an accrual basis for cross-phase assessment, the differences between the accounting system and tax law differences can be reversed during the tax impact on the future, the deferred income tax expense recognized as part of a project income statement, income statement, income tax expense comprises current income tax payable increase (decrease) in deferred income tax expense in the neglect of non-permanent timing differences and temporary differences in the case, the profit table = accounting profit before income tax expense rate *, the income tax expense and accounting profit before tax more than matched.
(B) comply with the deferred tax assets and liabilities of the two methods are defined in the accounting system and the reversal of tax law can be the difference in the tax differential impact on future periods, that is recognized as deferred tax assets or liabilities can be offset temporary (or timing) differences result in taxable income in future periods and to reduce the tax payable, which led to the inflow of economic benefits in future periods (debt reduction), consistent with the definition of assets. taxable temporary (or timing ) lead to differences in the amount of future taxable income during the tax to be paid and the increase in future periods that lead to the outflow of economic benefits (increase in liabilities), in line with the definition of liabilities Deferred income tax assets / deferred tax (debit) on behalf of prepaid corporate income tax assets, deferred tax liabilities / deferred tax (credit) on behalf of corporate income tax payable liabilities.

Based on the above described, in the absence of non-temporary timing differences in the case, the two eventually come to the income statement liability method of income tax expense and deferred taxes, net line. In addition, in terms of tax law or both to meet the debt method of accounting treatment, permanent differences in the accounting system and the differences in the tax law can not affect the reversal of tax differences are included in the current income tax expense and income tax payable.
Second, the two kinds of debt for the different characteristics based on the concept of assets and liabilities based on the balance sheet liability method from the assets, liabilities, book value and tax basis of different accounting systems and tax law look different, based on the concept of fee-based income on the income from the income statement liability method, the cost of the book value and tax basis of different accounting systems and tax law look at the different nature of the distinction between the two. concept of the income balance cost alternative is a new concept of corporate accounting standards system, one of the most remarkable feature of the traditional concept of fee income to revenue, cost more than matched companies have come to realize gains as a core business value assessment, assets, liabilities, revenue recognition is subordinate to, the cost of measurement; assets concept places liability period, beginning assets, liabilities, changes in the formation of changes in net assets as a core business value assessment, revenue, expenses subordinate to the measurement of assets and liabilities recognized this change in accounting concepts set of assets, liabilities elements in the accounting recognition of a dominant position and balance sheet in the financial statements the core of the system due to the assets, liabilities reflects the company's stock of wealth, of income, the cost of source, is predicted based on the company's future operating results, assets liabilities for the introduction of the concept of stakeholders to provide more value accounting information. balance concept through many aspects of the new guidelines, which, income tax accounting treatment of the balance sheet liability method of income statement liability method is clear-cut example of an alternative, focus is reflected in the old and new debt law and accounting objects of different accounting procedures.
(A) accounting for the different objects of the balance sheet liability method lies in recognition of temporary differences, that is, assets, liabilities, book value and tax basis differences arising from differences may be back, mainly from the balance sheet carrying amount of each project and comparison of tax law; income statement liability method of timing differences in the core is to confirm that tax revenue due to the recognition and accounting system, the time when cost differences arising from differences, mainly from the income statement items and the tax law compared temporarily differences and timing differences in the accounting system from a different perspective of tax law can be reversed with the difference. Similar to the assets, liabilities relative to comprehensive income defined by income, the cost has been defined to achieve wider benefits to assets, liabilities and tax costs derived by comparing the book value of the temporary differences compared to income areas cost book value and tax base compared to derive a wider scope of timing differences. contains all temporary differences and timing differences in the timing of a special type of non-temporary differences. Links to free download http : / / eng.hi138.com

Illustrative temporary timing differences:

1 General types of timing differences, such as various types of impairment of assets, accounting profit or loss, when the actual tax deduction provisions, pre-tax accounting profit is less than taxable income, the deductible temporary differences ; from temporary differences in perspective, the book value of assets less than the tax base for deductible temporary differences.

(2) a special type of timing differences, such as raised during the start-up costs, the accounting treatment included raising period profit or loss, tax law, starting in the month from production and operation of not less than 3 years amortized, pre-tax accounting profit is less than the taxable income amount of deductible temporary differences; from temporary differences of perspective, the book value of video start-up costs to zero, the tax base for the occurrence of unamortised amount of start-up costs (future deductible), the asset's carrying value less than the tax base for deductible temporary differences.

All timing differences are in line with the definition of temporary differences or temporary differences with the visual.

Temporary timing differences between non-illustrative:

1 included in capital surplus of the assets and liabilities at fair value (including the assessment of various types of assets available for sale financial assets at fair value, cash flow hedge of the fair value, converted to personal use real estate or stock investment of changes in the fair value of real estate, etc.). according to the accounting treatment of assets and liabilities at fair value, the cost of tax in accordance with the original tax.

(2) non-merger under the same control when included in the goodwill of the assets, liabilities, fair value changes in accounting treatment by the combined company assets and liabilities at fair value, the cost of tax in accordance with the original tax.

3 using the equity method of accounting for long-term equity investment is invested enterprises because of changes in equity other (excluding changes in net profit or loss) recognized in proportion to the long-term equity capital reserve included changes in accounting treatment adjusted increase (decrease) long-term equity investment, tax law at the original cost of the investment tax.

Differences in line with the above definition of temporary differences (the asset's carrying value and tax basis differences that can be reversed). Does not meet the definition of timing differences (refer to timing differences in accounting and tax revenue recognition, the time when cost differences resulting from pre-tax accounting profit and taxable income differences, but none of the accounting and tax law changes in fair value through profit or loss amount), does not conform to the definition of permanent differences (these differences will be back in the disposal of assets), which The timing differences are non-temporary differences.

4 tax losses and tax credits. Tax law can carryforward of accumulated losses and tax credits will result in future taxable income during the tax payable and the reduction of the balance sheet liability method defined deemed to deductible temporary differences, income statement debt for the absence of relevant regulations.

In the modern economic environment, asset revaluation, the form of mergers and other economic increasingly common, covering a variety of temporary differences include timing differences not between tax and accounting system can be the difference back areas, fully reflect the types of transactions the tax impact, provide more accurate and detailed accounting information.
(B) the accounting procedures of different balance sheet liability method in accounting period more assets, liabilities, the carrying amount and tax costs, respectively, come to deductible temporary differences and taxable temporary differences and tax impact of the cumulative balance of each recognized as deferred tax assets and liabilities at end of period, compared with the beginning balance of the period should come after the confirmation or reversal of deferred income tax assets and liabilities, then the period should be recognized or reversal of deferred income tax assets and liabilities of the the amount credited to deferred income tax expense offset by the computer program shows that the balance sheet liability method, deferred income tax directly derived the balance of assets and liabilities and indirectly from the two arrive at the amount of deferred income tax offset costs.

The end of the income statement liability method of accounting regulations and accounting system more tax revenue in the confirmation, the time when cost differences in pre-tax accounting profit and taxable income differences, the current deductible and taxable temporary differences of arrival amount multiplied by the tax rate, obtained current deferred income tax expense and deferred taxes by the computer program shows that the income statement liability method, deferred income tax expense recognized directly, and included in the related assets / liabilities (deferred tax) of the next.
(C) subject to the deferred tax liabilities set a different method to set the balance sheet deferred tax assets and liabilities of two subjects, were recognized for deductible temporary differences and taxable temporary differences between the tax effect, respectively, reflecting the end of the pre- pay income tax assets and liabilities, income tax payable.

Income statement liability method deferred tax based only - subject, a comprehensive reflection of deductible and taxable tax effect of timing differences, that is, only the recognition of deferred income tax assets and liabilities of the arrival rate - net of deferred tax not strictly distinguish between the business end of the income tax assets and prepaid income tax payable liabilities.

In summary, the two belong to the liability method of tax effect accounting, tax and accounting are recognized differences in the tax system can affect the back, and as part of the income statement Income tax expense - deferred income tax expense at the same time, namely, Deferred income tax under, recognized as a prepaid asset or corporate liability due, but the concept of assets and liabilities based on the new debt for income-based cost concept than the original debt method has obvious advantages, focusing on temporary differences reflected covers a variety of timing differences not included in the areas of difference may be back to provide more accurate and detailed accounting information. In addition, the new debt for deferred income tax assets and liabilities are presented separately, but also strictly follow the assets, liabilities, divided definition. Links to free download http://eng.hi138.com

Links to free download http://eng.
hi138.com

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