acct chp 16

Deferred Tax Asset

Will lead to future deductible amounts

Deferred Tax Liability

Will lead to future taxable amounts

DTL

Unrealized gain from recording investments at fair value (taxable when asset is sold)

DTL

Installment sale of property (installment method for taxes)

DTA

Rent collected in advance

DTA

Subscriptions colled in advance

DTA

Other revenue collected in advance

DTA

Estimated expenses and losses (tax-deductible when paid)

DTA

Unrealized loss from recording investments at fair value or inventory at LCM (tax-dedcutible when asset is sold)

DTL

Accelerated depreciation on the tax return in excess of straight-line depreciation in the income statement

DTL

Prepaid expenses (tax-deductible when paid)

Neither DTA or DTL

Interest received from investments in bonds issued by state and municipal governments

Neither DTA or DTL

Investment expenses incurred to obtain tax-exempt income

Neither DTA or DTL

Life insurance proceeds on the death of an insured executive

Neither DTA or DTL

Premiums paid for life insurance policies when the pay is the beneficiary

Neither DTA or DTL

Compensation expense pertaining to some employee stock option plans

Neither DTA or DTL

Fines and penalties due to violations of the law

Neither DTA or DTL

Difference in tax paid on foreign income permanently reinvested in the foreign country and the amount that would have been paid if taxed at U.S. rates.

Neither DTA or DTL

Portion of dividends received from U.S. corporations that is not taxable due to the dividends received deduction

Neither DTA or DTL

Tax deduction for depletion of natural resources (percentage depletion) that is allowed in excess of an already full-depleted asset's cost.

Permanent differences

The difference is irreversible. Does not give rise to DTA or DTL's. caused by events that are under current law, never affect taxable income or taxes payable.

DTA

Net operating loss carryforward

DTA

Research and development costs reported in the income statement but elected to be capitalized and amortized over five years for tax purposes.

DTA

Organization costs reported in the income statement but amortized and deducted over five years for tax purposes.

Neither DTA or DTL

The nondeductible portion of travel and entertainment expenses