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terminology for LOS 37.a - Coggle Diagram
terminology for LOS 37.a
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deferred tax asset: balance sheet asset value when taxes payable (tax return) is greater than income tax expense (income statement)
valuation allowance: reduction of DTA (contra account) based on likelihood that future tax benefit will not be realised
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deferred tax liabilities: balance sheet liability when income tax expense (income statement) is greater than taxes payable (tax return)
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permanent difference
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when firm's enacted tax rate increases, DTA and DTLs both increase, and when tax rate decreases, DTA and DTLs both decrease. which affects income tax expense