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Deferred Taxes (Temporary Differences (GAAP says to recognize a…
Deferred Taxes
Temporary Differences
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Note: Deferred Tax Asset and Liabilities are calculated using the FUTURE tax rates and not the current one
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Valuation Allowance
If it is probable that not all of a DTA (debit) will be realized, then the DEA account must be written down(Credit) to reflect this probability
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Permanent Differences
Have no Tax impact
When calculating the differences between book and tax income, subtract out the permanenet differences before applying a future tax rate
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