[calicpa]

I am struggling with deferred tax assets and liabilities, specifically what results in a DTA and what results in a DTL. Does anyone have any easy way to remember or any useful tools or nuemonics(i know i didn’t spell it right) to remember what is what?

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[tough_kitty]

I liked this:

https://www.public.asu.edu/~bac524/deferred_taxes.pdf

FAR: 81 (May 2013)
BEC: 81 (July 2013)
REG: 83 (August 2013)
AUD: 82 (November 2013)
California CPA since 1/30/14

[tough_kitty]

I liked this:

https://www.public.asu.edu/~bac524/deferred_taxes.pdf

FAR: 81 (May 2013)
BEC: 81 (July 2013)
REG: 83 (August 2013)
AUD: 82 (November 2013)
California CPA since 1/30/14

[finne]

I like that powerpoint that tough_kitty posted. The thing I'd especially focus on is slide 9 on page 5 of that document. I'm not a fan of memorizing things or making complicated mnemonics so I try and break things down to their conceptual components:

For DTAs and DTLs, keep in mind *why* you're recording them and it'll be easier for you to figure out *which* to record. A Deferred Tax Liability is a liability because you are paying less tax now, but you will have to pay more tax in the future to make up for that. A Deferred Tax Asset is an asset because you are paying more tax in the current period, but you will pay less in the future, almost like a prepaid asset; like “prepaying” your tax.

So when you're looking at a problem, figure out how much is recorded on the financial statements and how much is recorded on the income tax statement. Then see whether the difference will result in more or less tax paid now. That translates to a DTA or DTL.

You can visualize this with the JE (slide 10). Income Tax Expense is the amount recorded on the books, based on the accrual GAAP income. Income Taxes Payable is the amount that comes off the income tax return. The difference between the two is your DTA/DTL.

Hope that helps a bit! (I know it helped me to write it out and explain it to myself, lol. FAR on Oct 21!)

REG - 85
AUD - 99
FAR - 89 - w/ NINJA Audio and Blitz
BEC - 91

Using Wiley - books and test bank - 6 months - all 4 first time

[finne]

I like that powerpoint that tough_kitty posted. The thing I'd especially focus on is slide 9 on page 5 of that document. I'm not a fan of memorizing things or making complicated mnemonics so I try and break things down to their conceptual components:

For DTAs and DTLs, keep in mind *why* you're recording them and it'll be easier for you to figure out *which* to record. A Deferred Tax Liability is a liability because you are paying less tax now, but you will have to pay more tax in the future to make up for that. A Deferred Tax Asset is an asset because you are paying more tax in the current period, but you will pay less in the future, almost like a prepaid asset; like “prepaying” your tax.

So when you're looking at a problem, figure out how much is recorded on the financial statements and how much is recorded on the income tax statement. Then see whether the difference will result in more or less tax paid now. That translates to a DTA or DTL.

You can visualize this with the JE (slide 10). Income Tax Expense is the amount recorded on the books, based on the accrual GAAP income. Income Taxes Payable is the amount that comes off the income tax return. The difference between the two is your DTA/DTL.

Hope that helps a bit! (I know it helped me to write it out and explain it to myself, lol. FAR on Oct 21!)

REG - 85
AUD - 99
FAR - 89 - w/ NINJA Audio and Blitz
BEC - 91

Using Wiley - books and test bank - 6 months - all 4 first time

[Author]

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