A liability representing the differences between the income tax expense associated with the revenues and expenses reported on a corporation's income statements and the actual income tax appearing on the corporation's income tax returns. To Top
The estimated future tax obligations that usually arise when different depreciation methods are used for financial statements and tax purposes. It is also an add-back to the statement of cash flows. Deferred income taxes include accumulated tax deferrals due to accelerated depreciation and investment credit.
Income tax that would be payable immediately unless placed in a deferred planning product such as a Registered Retirement Savings Plan (RRSP)
Obligation to pay income taxes in future years
An account used to record the difference between income tax expense on the income statement and income taxes payable for the year to federal and state governments.
ASSETS or LIABILITIES that arise from timing or measurement differences between tax and accounting principles.
Income tax that would otherwise be payable currently, but which is not paid immediately. This is because larger allowable deductions are made when calculating taxable income than when calculating net income in the financial statements. An acceptable practice, it is usually the result of timing differences and represents differences in accounting reporting guidelines and tax reporting guidelines.