Deferred Tax Accounting: Comprehensive Guide with Examples

About Course

Deferred tax accounting can be complex, but it is essential for businesses and financial professionals to understand how taxes affect financial statements. This course provides an in-depth exploration of deferred tax liabilities and assets, guiding you through their calculation, recognition, and application using real-world examples. By focusing on the fundamental concepts and providing practical scenarios, students will gain a clear understanding of the deferred tax framework and its importance in accounting.

Section 1: Introduction

The course begins with a brief Introduction that lays the foundation for deferred tax accounting. In Lecture 1, you will get an overview of how deferred tax fits into financial accounting and reporting, highlighting its role in ensuring accurate profit representation. This sets the stage for understanding how taxes differ between financial accounting and tax reporting.

Section 2: Calculation of Profit

In this section, we dive into the calculation of profit and how deferred taxes come into play. Lecture 2 introduces the Calculation of Profit, emphasizing the concept of tax adjustments. Lecture 3 covers the Matching Concept, which ensures that revenues and expenses are recognized in the same period. Lecture 4 explains the key differences between GAAP vs. Tax Accounting, helping you understand how financial and tax accounting differ. In Lecture 5, we explore What Creates Deferred Tax, followed by a detailed breakdown of Deferred Tax Liability in Lecture 6. To solidify these concepts, Lectures 7 and 8 provide a practical example, showing you step-by-step how deferred tax liabilities arise and are calculated.

Section 3: Deferred Tax Asset

Building on the previous section, this part of the course focuses on Deferred Tax Assets. In Lecture 9, we define and explain how deferred tax assets are recognized. The section features multiple real-world examples, starting from Lecture 10 through Lecture 14, where students work through various scenarios that highlight the importance of timing differences and how deferred tax assets can arise from losses or deductible temporary differences.

Section 4: Valuation Allowance

Valuation allowances are a critical concept in deferred tax accounting, particularly in determining whether a company can utilize its deferred tax assets. Lecture 15 introduces Valuation Allowance, explaining why and how it is applied. Lecture 16 continues with more in-depth analysis. In Lectures 17 and 18, you will learn about the Sources of Taxable Income and how the reversal of deferred tax assets affects financial reporting. Lectures 19 and 20 discuss Net Operating Losses, while Lectures 21 to 25 provide additional examples to reinforce understanding, showing how valuation allowances and operating losses interplay in tax accounting.

Section 5: Revalued Assets and Conclusion

The final section wraps up the course by discussing Revalued Assets in Lecture 26. This lecture highlights the implications of revaluing assets for tax purposes and how deferred taxes are adjusted accordingly. Lecture 27 concludes the course with a summary of key concepts and takeaways, reinforcing the importance of deferred tax accounting in maintaining accurate financial records.

Conclusion:

By the end of this course, students will have a comprehensive understanding of deferred tax accounting, including the calculation of deferred tax liabilities and assets, the application of valuation allowances, and the impact of revalued assets. Through practical examples, you will gain the confidence to apply these principles in real-world scenarios, ensuring that your financial statements reflect accurate tax positions.

What Will You Learn?

The differences between GAAP and tax accounting.
How to recognize and calculate deferred tax liabilities and assets.
Practical examples of deferred tax in action, covering both profit and loss scenarios.
The concept of valuation allowances and their application.
The treatment of net operating losses and the reversal of deferred tax assets.
The impact of revalued assets on deferred tax accounting.

Material Includes

3 hours on-demand video
Access on mobile and TV

Requirements

Basic Understanding of Accounting Principles: Students should have a foundational knowledge of accounting, including concepts like profit, loss, and the matching principle.
Familiarity with Financial Statements: Students should be comfortable reading and interpreting financial statements such as balance sheets, income statements, and cash flow statements.
Interest in Tax Accounting: While prior experience in tax accounting is not mandatory, a basic understanding of tax systems and how taxes affect businesses will be beneficial.
Willingness to Work on Practical Examples: The course involves several hands-on examples, so students should be ready to engage with real-world scenarios involving deferred tax calculations.

Target Audience

Accounting Students and Graduates: Those looking to deepen their understanding of deferred tax, asset valuation, and tax accounting principles.
Finance Professionals: Accountants, auditors, and financial analysts who want to improve their knowledge of deferred tax calculations and the impact of tax on financial statements.
Business Owners and Entrepreneurs: Individuals running their own businesses who need to understand how tax liabilities and deferred taxes affect their financial health.
Tax Consultants and Advisors: Professionals providing tax advisory services, especially those looking to specialize in deferred tax assets, liabilities, and valuation allowances.
Anyone Interested in Corporate Taxation: Individuals with a general interest in tax accounting and corporate financial structures, even with minimal prior experience.