Learning Outcome Statements

1. Key Terms

a. describe the differences between accounting profit and taxable income and define key terms, including deferred tax assets, deferred tax liabilities, valuation allowance, taxes payable, and income tax expense;

2. Deferred Tax Assets and Liabilities

b. explain how deferred tax liabilities and assets are created and the factors that determine how a company's deferred tax liabilities and assets should be treated for the purposes of financial analysis;

d. calculate income tax expense, income taxes payable, deferred tax assets, and deferred tax liabilities, and calculate and interpret the adjustment to the financial statements related to a change in the income tax rate;

3. Determining the Tax Base of Assets and Liabilities

c. calculate the tax base of a company's assets and liabilities;

e. evaluate the impact of tax rate changes on a company's financial statements and ratios;

4. Temporary versus Permanent Differences

f. distinguish between temporary and permanent differences in pre-tax accounting income and taxable income;

5. Recognition and Measurement of Current and Deferred Tax

g. describe the valuation allowance for deferred tax assets - when it is required and what impact it has on financial statements;

h. explain recognition and measurement of current and deferred tax items;

6. Presentation and Disclosure

i. analyze disclosures relating to deferred tax items and the effective tax rate reconciliation and explain how information included in these disclosures affects a company's financial statements and financial ratios;

7. Comparison of IFRS and U.S. GAAP

j. identify the key provisions of and differences between income tax accounting under International Financial Reporting Standards (IFRS) and US generally accepted accounting principles (GAAP).