[TCav12579]

I have come to the conclusion that DTA & DTL are the bane of my existence… Only topic I can say that I truly struggled with in undergrad and this has now transferred over to my FAR preparation (SURPRISE!). Anyway, I am curious on a couple of things:

1. Is this a heavily tested topic? I believe there are around 60 MCQs in Becker on DTA & DTL. Also, from what i’ve seen on the blueprints it is NOT a SIM topic. Is this correct?
2. Anyone have any insight on mastering the topic other than Becker’s resources? They don’t seem to be helping me much.

I appreciate any insight. Thanks in advance!

[Troys22]

This is certainly one of the most challenging topics for me as well. I try to think of it as whether or not the difference will be taxable later or not. For example, if book depreciation exceeds tax depreciation now, then at a later date tax depreciation will exceed book depreciation, so therefore it is a DTA because you are deferring the deduction until later and a deduction for tax purposes is a good thing so think of a good thing as an asset or DTA. As for DTL, think of the difference being taxable at a later dater. For example, if you recognize a sale when it occurs but for tax purposes you don't recognize until later date. Therefore at the later date, you are increasing you taxable income which would be a DTL. Think of it as increasing taxable income is not a good thing. This is what I have found to be the easiest way to remember. However, I still get confused at times and would like to know other ways people keep this straight.

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