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Accounting for Income Taxes - v10 (Course Id 1778)

QAS / Registry
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Author : Jae K. Shim, Ph.D., CPA
Course Length : Pages: 74 ||| Review Questions: 28 ||| Final Exam Questions: 30
CPE Credits : 6.0
IRS Credits : 0
Price : $53.95
Passing Score : 70%
Course Type: NASBA QAS - Text - Technical - NASBA Registry
Primary Subject-Field Of Study:

Accounting - Accounting for Course Id 1778

Description :

Accounting for income taxes is one of the more challenging topics of financial accounting. Corporations must file income tax return following the guidelines developed by the IRS.  Because GAAP and tax regulations differ in a number of ways, so frequently do pretax financial income and taxable income. Hence, the amount that a company reports as tax expense will differ from the amount of taxes payable to the IRS.  Those differences produce a complex accounting standard.

This online income tax course is designed to help you navigate the complexities of this topic and earn CPE accounting skills. It covers the accounting and financial reporting requirements for income taxes discussed in ASC 740 Income Taxes. It addresses the basic principles such as the asset and liability method, assessment for uncertain tax positions, and the effect of temporary differences.  It explains the process of accounting for income taxes, including valuation allowance, asset acquisition, intraperiod allocations, and interim reporting. It describes presentation and disclosure requirements. It also provides specific examples to illustrate the application. Relevant references to and excerpts from ASC 740 are discussed throughout the course.

Usage Rank : 0
Release : 2020
Version : 1.0
Prerequisites : Understanding of GAAP.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : QAS Self Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 23-Jan-2021
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - Text - Technical - NASBA Registry - 1778

Keywords : Accounting, Accounting, Income, Taxes, v10, cpe, cpa, online course
Learning Objectives :

Course Learning Objectives

After studying this course, you will be able to:
    1. Recognize the basic principles of accounting for income taxes
    2. Identify recognition and measurement requirements for uncertain tax positions
    3. Recognize temporary differences and identify how these differences may arise
    4. Distinguish between permanent and temporary differences
    5. Identify method for computing deferred taxes
    6. Recognize basic rules for income taxes in interim reporting
    7. Recognize the reporting requirements for income taxes
Course Contents :

Chapter 1 - Accounting for Income Taxes

Part I. Overview of ASC 740

A. Objectives and Basic Approach

B. Scope and Scope Exceptions

Example 1: Determining Whether a Tax Is an Income Tax

C. Fundamentals of Income Tax

1. Computation of Income Tax Expense or Benefit

2. The Asset and Liability Method

What are the Basic Principles?

D. Current Standard Setting Activity

E. Comprehensive Illustration: Computation of Income Tax Expense

Part II. Tax Position Assessment

A. Basic Recognition Threshold

Example 2: Definition of a Tax Position

B. Two-Step Process

1. Recognition of a Tax Position

Example 3: Administrative Practices—Asset Capitalization

2. Measurement of a Tax Position

Example 4: Measurement with Information about the Approach to Settlement

C. Comprehensive Illustrations

1. Recognition of a Tax Position

a. Recognition Determinations Made for Each Unit of Account

b. Valuation Allowance and Tax-Planning Strategies

2. Measurement of a Tax Position

a. Highly Certain Tax Positions

b. Measurement of a Tax Position after Settlement of a Similar Position

Review Questions - Group 1

Part III. Temporary Differences

A. Temporary Differences vs. Permanent Difference

1. Determination of a Temporary Difference

a. The Causes

Example 5: Temporary Differences

b. Common Situations

Which Depreciation Method to Use

Exhibit A: Typical Temporary Differences

2. Determination a Permanent Difference

Example 6: Permanent Differences

B. The Reversal of Temporary Differences

Example 7: Excluding the Reversal of Existing Taxable Temporary Differences

Exhibit B: Examples of Temporary Difference Reversal Patterns

C. Comprehensive Illustrations

Review Questions - Group 2

Part IV. Recognition and Measurement

A. Applicable Tax Rate

1. General Rules

Example 8: Determining the Average Graduated Tax Rate

2. AMT Considerations

3. BEAT Considerations

FASB Staff Q&A on the Accounting for the BEAT

B. Accounting for Deferred Taxes

1. Exceptions to the Recognition of Deferred Taxes

2. Deferred Tax Liabilities

Example 9: Determining Deferred Tax Liability

3. Deferred Tax Assets

Example 10: Determining Deferred Tax Asset

C. Valuation Allowance

1. Sources of Taxable Income

Example 11: The Calculation of Future Taxable Income

2. Tax-Planning Strategies

3. More-Likely-Than-Not Criterion

Example 12: Applying Valuation Allowance

What is the SEC’s Focus?

Exhibit C: SEC Comments on Valuation Allowances

D. Comprehensive Illustrations

1. Deferred Tax Liability

2. Valuation of Deferred Tax Assets

Review Questions - Group 3

Part V. Acquired Temporary Differences

A. Asset Acquisition or a Business Combination

1. Initial Screening Test

2. Application of Framework

Example 13: The Definition of a Business

B. Asset Acquisition

Example 14: Transactions Resulting in Deferred Credit

C. Business Combinations

1. General Rules

Example 15: Tax Effects of Purchase Business Combination

2. Change in Valuation Allowance

Example 16: Outside Measurement Period

D. Comprehensive Illustrations

1. Asset Acquisition or Business

2. Asset Acquisition

a. Asset Acquired for More than Tax Basis

b. Asset Acquired with Tax Basis Greater than Book Basis

Review Questions - Group 4

Part VI. Intraperiod Tax Allocation

A. Allocation to Continuing Operations

Example 17: Loss from Continuing Operations with a Gain on Discontinued Operations (Tax Benefit Realizable)

B. Operating Loss Tax Benefits

C. Items Charged or Credited Directly to Shareholders’ Equity

D. Comprehensive Illustrations

1. Tax Allocation between Continuing Operations and Discontinued Operations without NOL Carryforward

2. Tax Allocation between Continuing Operations and Discontinued Operations with NOL Carryforward

Part VII. Income Taxes in Interim Periods

A. General Rules

Example 18: Calculation of the Estimated Annual Effective Tax Rate

B. Changes in Tax Laws, Rates, or Status

1. Changes in Tax Laws or Rates

Example 19: Change in Tax Rates

Example 20: Legislation Effective in a Future Interim Period

2. Change in Tax Status

Example 21: Retroactive Change from Nontaxable Status

Example 22: Calculation of a Built-in Gain Deferred Tax Liability

Exhibit D: The Key Provisions of the Tax Cuts and Jobs Act

C. Multiple Tax Jurisdictions

Example 23: Ordinary Income in All Jurisdictions

D. Comprehensive Illustration: Change in Enacted Tax Rate

Review Questions - Group 5

Part VIII. Financial Statement Presentation and Disclosure

A. Balance Sheet

1. General Rules

Example 24: Offset of Deferred Tax Assets and Liabilities

2. Unrecognized Tax Benefits

Example 25: Unrecognized Tax Benefits Related Disclosures

3. Special Areas

a. Subsidiaries and Corporate Joint Venture

b. Financial Services-Depository and Lending

B. Income Statement

1. Classification

2. General Rules

C. Summary of Disclosure Requirements

D. Comprehensive Illustration: Uncertain Tax Position

Part IX. Other Matters

A. Transactions Directly between a Taxpayer and a Government

B. Separate Financial Statements of a Subsidiary

C. Interperiod Tax Allocation

Example 26: Interperiod Tax Allocation with Temporary Difference and Beginning Deferred Taxes

D. Dividends on Restricted Stock and Options

E. Property Taxes

Example 27: Reporting Property Taxes


1. Income Tax Deferrals

2. Intra-Entity Transfers of Assets (Other than Inventory)

Review Questions - Group 6


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