[Jasminekoko]

I’m literally 4 hours into 15 MCQ of Becker F6. OMG. Read the book, watched the lecture, read some more online and I’m still lost. Please anyone can get me though this.

How you know it is a DTA or DTL? What does this mean with: DTA= Future taxable income < Future F/S income?

Some materials online says that current taxable income < Pretax income = DTL? What the heck. I could really use some help right now. Thanks so much.

[Mjganier]

Someone correct me if this is backwards. Took FAR last August so I may be rusty. You have different income amounts. The company's income per their books and the company's taxable income per their return. If book income < tax income = DTA since they're paying more tax now which will benefit them in the future. If tax income < book income = DTL since they will have to pay more tax in the future.

FAR 8/18/2014--87
AUD 10/18/2014--78
REG 11/24/2014--76
BEC 2/28/2015--76

"If you can't explain it simply, you don't understand it well enough"-Albert Einstein

Study Mats: Cpaexcel study text and EQ, Ninja MCQ, Ninja notes

[highlightnumb]

Thats correct mj. Your 2nd post is exactly right. If you can remember that concept when it comes to accounting for income taxes you will in good shape. Just remember if you pay more taxes this year then you pay less next year DTA, pay less this year then you pay more next year DTL. This concept is a result from temporary differences such as depr, accrued warranty, rental income in advance. For example, if you receive rental income in advance the IRS wants you to recognize the income now but GAAP allows that income to be deferred on your books when you receive it. So this goes back to what you said in your post, taxable income > book income = DTA. And the reason why they call it DTA because it will reduce your future taxes which in essence is indirect cash inflow kind of like what you learned in BEC for Capital purchases with the tax savings from depreciation. Who better than us? Nooooobody lol

FAR. Feb 2014 76
REG. Jan 2015 79 half way there!!
BEC. Feb 2015 79 thank you God!!
AUD. Apr 20, 2015 and will be done. Hold that thought 65, 7/14/15 85!
Ok where was I? Oh thats right now I'm Done!!!!!!!!!
Ethics 92!!

"You down wit SEC?, yeah you know me!!!"

Cali Candidate

All Becker Materials, Wiley Test Bank, Ninja audio, Ninja MCQ, Ninja Notes

[highlightnumb]

As far as your 1st post goes. They are just explaining it from a different angle but still the same concept. Like i was explaning tax return income > book f/s income = dta which means that future tax return income will be less than future book income because that dta is reducing the taxable income. Current taxable income is higher this year but when that temporary difference reverses in the future, taxable income will be lower. Same with book income being lower in current year but higher in future years. Temporary differences cause a seesaw effect between tax return income and book income. Sorry if i am babbling, this was challenging to me when i was studying for this.

FAR. Feb 2014 76
REG. Jan 2015 79 half way there!!
BEC. Feb 2015 79 thank you God!!
AUD. Apr 20, 2015 and will be done. Hold that thought 65, 7/14/15 85!
Ok where was I? Oh thats right now I'm Done!!!!!!!!!
Ethics 92!!

"You down wit SEC?, yeah you know me!!!"

Cali Candidate

All Becker Materials, Wiley Test Bank, Ninja audio, Ninja MCQ, Ninja Notes

[Jasminekoko]

Thank you very much. It certainly helped a lot. Any more would still be needed.

[highlightnumb]

Oh my bad i thought mj was the OP. Nevertheless, you know what i mean lol

FAR. Feb 2014 76
REG. Jan 2015 79 half way there!!
BEC. Feb 2015 79 thank you God!!
AUD. Apr 20, 2015 and will be done. Hold that thought 65, 7/14/15 85!
Ok where was I? Oh thats right now I'm Done!!!!!!!!!
Ethics 92!!

"You down wit SEC?, yeah you know me!!!"

Cali Candidate

All Becker Materials, Wiley Test Bank, Ninja audio, Ninja MCQ, Ninja Notes

[Jasminekoko]

Any more suggestions would be appreciated.

[Author]

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