Which depreciation method is most common for financial reporting? Which depreciation method is most common for tax reporting? Why do companies choose these methods?

Q: When a company records a deferred tax asset, it may need to also report a valuation allowance if it…

A: 1.FASB ASC 740-10-30-17 citation named as “Income Taxes–Overall–Initial Measurement Establishment of…

Q: In which situation does the tax depreciation allow the firms to defer paying income taxes?

A: Deferment of income tax liability is also called as Deferred Tax Liability. It means tax liability…

Q: Account for corporate income taxes; explain the effects of these taxes onbefore-tax profits and…

A: Corporate income taxes are taxes paid by companies on their income

Q: What are the Gain Taxes on Asset Disposals?

A: When a asset is disposed, if the value realised on such disposal is more than the carrying amount of…

Q: What is the difference between income which is "realized" and income which is "recognized"?  Which…

A: Financial accounting requires to report all the income and expenses on the books and compute the…

Q: Which of the following statements is false?  A For tax purposes, companies can use the MACRS…

A: MACRS means The Modified Accelerated Cost Recovery System

Q: A corporation A. must use the same depreciation method for tax and financial reporting purposes. B.…

A: Depreciation: Depreciation is defined as a reduction in the value of assets that occurs over time as…

Q: Why do many companies use one method to calculate depreciation for the income statement prepared for…

A: Companies use different methods for tax reporting and financial reporting because by using the…

Q: Which of the following statements is true?   A.) A company must use FIFO for both tax reporting and…

A: There are various methods available for inventory valuation.

Q: why is inventory management important in tax planning

A: why is inventory management important in tax planning answer tax planning means the planning of tax…

Q: Which of the following statements about depreciation is not true? a. Depreciation helps companies…

A: Depreciation is a reduction in value of tangible fixed non-current assets due to: Constant use Wear…

Q: Briefly describe the tax depreciation system under MACRS.

A: MACRS is an abbreviation of the Modified Accelerated Cost Recovery System.  The present U.S. tax…

Q: What is the Tax depreciation method?

A: Tax depreciation is the depreciation cost asserted on a government form by a citizen to represent…

Q: The tax treatments of assets affects the risk structure of assets True False

A: The composition of a company's asset helped in determining how the balance of long-term credits and…

Q: analyze disclosures relating to deferred tax items and the eff ective tax rate reconciliation,and…

A: Disclosures relating to deferred tax items can provide valuable information to the analysts. But the…

Q: Do the liabilities and assets that are generated by using the 'balance sheet method' of accounting…

A: The implication of the rules of conceptual frame work will helpful to create best standard in the…

Q: explain what a growing balance in the deffered income tax liability is likely to indicate about a…

A: This question deals with the IFRS 12 "Deferred tax" As per IFRS,  When there is temporary taxable…

Q: Which of the following is true

A: The correct answer is 2. Investments in stocks of other companies accounted for using the equity…

Q: How are deferred taxes calculated? What determines if the company has a deferred asset or a deferred…

A: Deferred tax is a fictitious asset or liability that reflects company income taxation on a premise…

Q: What is the difference between depreciation expense and accumulated depreciation?

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Assuming it meets the conditions to net assets and liabilities, how will the company report deferred…

A: Under US GAAP, Crystal​ Critters should net off all the deferred tax assets and liabilities into one…

Q: Depreciation is needed only for computing income taxes. True or false?

A:

Q: Which of the following items isreported net of related income taxes?a. Gain or loss from…

A:

Q: Describe Tax Depreciation Methods?

A: Depreciation is a non-cash expense for the company. The depreciation expenses is charged because the…

Q: l financing affects tax liability

A: Step 1 Debt financing is well regulated under U.S. tax law. Businesses can deduct interest payments…

Q: How can we determine the annual depreciation for tax purposes?

A: Depreciation Depreciation refers to a constant reduction in the cost of an asset. There are two ways…

Q: What is depreciation and amortization? What's the difference? It is an accounting concept that has…

A: Depreciation is a charge to account for a reduction in the value of a capital asset arising because…

Q: How does depreciation give tax benefits? What are the advantages of Internal Financing?

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Given the frequently changing nature of depreciation and tax law,what must we use?

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to…

Q: Which of the following is used when computing for the accounting rate of return (ARR)? a. Income…

A: The accounting rate of return is the average net income an asset is expected to generate on the…

Q: Why are disclosures about deferred taxes useful to identify the ways in which publicly-traded…

A: Here discussion about the disclosure about the benefits which are availed in the form of relief in…

Q: A valuation allowance for deferred tax assets   Select one: a. Is required when future deductible…

A: A valuation allowance is a counter-account to a deferred tax asset account that reflects the amount…

Q: Using tax depreciation for tax purposes and straight-line depreciation for financial reporting, do…

A: Deferred tax liability is the amount of tax that is due for the period but not been paid. It arises…

Q: Explain what is meant by an accelerated depreciationmethod. Are accelerated methods more widely used…

A: The term accelerated depreciation implies that in the early years of the existence of the asset,…

Q: Define tax depreciation methods

A: Tax: Tax can be defined as the compulsory fees charged by the government of the country or the…

Q: Illustrate the significance of depreciation and income taxes?

A: Depreciation is the charge against the usage, wear and tear or obsolescence of the asset in the…

Q: What are the benefits of calculating depreciation differently for financial reports and for tax…

A: Depreciation means decline in the estimation of benefit inside its valuable life because of mileage…

Q: How is a business activity distinguished from an investment activity? why is this distinction…

A:

Q: Describe the method of Accounting for Depreciation and Income Taxes?

A: Generally Accepted Accounting Principles (GAAP): Generally Accepted Accounting Principles are the…

Q: Describe income tax methods of depreciation.

A: The concept of depreciation applies to both tax and accounting practices. For taxation purposes,…

Q: How, and why, does the depreciation reported for tax purposes differ from that reported in the…

A: Depreciation is the amount to be written off periodically to charge the decline in value of a fixed…

Q: What is the proper term for depreciation methods used for tax purposes?  Provide the acronym and the…

A: Proper Term Used for depreciation for Tax Purpose:   The term used for Depreciation is MACRS   Full…

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.