[jimboace88]

I’m looking over F6 in Becker and I was just wondering if this was right:

Would it be accurate for me to say that when Tax < Book, there is a deferred tax liability and that when Tax > Book, there is a deferred tax asset?

I understand that this relates only to temporary differences. Becker’s explanation is so wordy (unnecessarily so) and I vaguely remember the explanation in my Intermediate Accounting course to be much more succinct.

FAR 07/27/11 - 87
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[Anonymous]

jimbo- that is the way that I understand the concept as a general rule. If you have a higher tax than book, this means that you already paid the taxes thus you have a DTA. and vice versa.

I think this is a good general rule (I used it on my exam and was able to pass) so it should be helpful and easy to remember!

[Anonymous]

Yes thats what I use too. and to further remember the < looks like an L as in L for Liability

[hardworker]

SIM #1 on wiley 2012 deferres taxes

After looking at the solution for this SIM, I realized that the book solved it differently than how Phil taught it. For example: they subtract the tax rates from year to year to get deferred tax liability and deferred tax expense. However, I thought that to get deferred tax liability, you take the future taxable amount (which shouldn't it be the difference between Tax Income and Book Income?) and multiply iy by the future tax rate. So for number 3, I basically took the $200,000 which is the difference between the Book Income of $1,000,000 and Tax Income of $800,000 and multiplied it by the future tax rate of 30% and got $60,000. But the answer is $35,000.

Also for #4 I did the same thing. Difference between the tax income and book income (future taxable amount) is $250,000 but there is no future tax rate so I used the 30% from year 2010 and I got $75,000. But the answer is $135,000. I must be doing something wrong and I'm very confused. HELP PLEASE!

[Author]

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