deferred income tax

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Deferred Income Tax

On a balance sheet, a tax that a company will owe on its income, but that has not yet been assessed. Because of differences between tax regulations and the Generally Accepted Accounting Principles, income may be recognized on a balance sheet for accounting purposes, but not for tax purposes. However, that income will eventually be recognized for tax purposes and income tax will then be assessed. This tax is called deferred income tax, and is recorded as a liability on the balance sheet.

deferred income tax

A liability created by income recognized for accounting purposes but not for tax purposes. The liability recognizes future taxes due when earned income is later reported for tax purposes. Use of accelerated depreciation for reporting to the Internal Revenue Service and straight-line depreciation for reporting to stockholders is one of the major reasons a firm includes deferred income taxes as a liability on its balance sheet.
References in periodicals archive ?
To simplify the presentation of deferred income taxes, FASB is proposing that for such entities, deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position.
0291, respectively, primarily as a result of deferred income taxes generated by the appreciation of the US Dollar during the period, which negatively impacted Q2 '13 net income.
Excluding the income tax benefit from the change in deferred income taxes valuation allowance, quarterly adjusted net income was approximately $1.
One issue that the Board left unresolved with this standard was whether it is appropriate to report deferred income taxes at their discounted present value.
5 million adjustment to deferred income taxes, which resulted in no tax benefit being recorded against the loss for the current fiscal year.
In fact, FAS 142 refers to paragraph 30 of FAS 109: "Deferred income taxes are not recognized for any portion of goodwill for which amortization is not deductible for income tax purposes," and "the recognition of deferred income taxes is required when amortization of goodwill is deductible for tax purposes.
121 might decrease deferred income taxes, the following simplified example is used:
Noncurrent assets include utility deposits, deferred income taxes, property and equipment, less depreciation costs.
By including deferred income taxes in the capital base, the provinces display a consistency, inasmuch as they are following a taxable capital concept.
Therefore, 2Q12 Adjusted Net Income, excluding deferred income taxes, was $186.
Not too long ago, the instructional focus was on the procedural aspects of highly technical issues such as measuring deferred income taxes or calculating pension expense.
The Board sought task force members who would be knowledgeable in accounting for deferred income taxes and who were in a position to see firsthand what implementation problems exist when companies are first beginning to apply Statement 96.