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Deferred Tax Assets & Liabilities Accounting for Income Taxes — Intermediate Accounting, CPA & CMA

Learn deferred tax assets and deferred tax liabilities in this complete Accounting for Income Taxes chapter from Farhat Lectures. This Intermediate Accounting course explains why book income differs from taxable income, how temporary differences create future tax consequences, and how income taxes are reported under U.S. GAAP.
Deferred tax accounting is one of the most difficult topics for accounting students, CPA FAR candidates, and CMA candidates. These 26 manually ordered lessons build the chapter from the underlying book-versus-tax concept through deferred tax calculations, journal entries, presentation, and exam applications.
WHAT THIS COURSE TEACHES
• Accounting for income taxes under U.S. GAAP
• Book income versus taxable income
• Book basis versus tax basis
• Temporary differences and their future tax consequences
• Deferred tax assets (DTAs)
• Deferred tax liabilities (DTLs)
• Deductible versus taxable temporary differences
• Permanent differences
• Income tax expense and income taxes payable
• Valuation allowances for deferred tax assets
• Net operating loss carryforwards
• Enacted tax rates and changes in tax rates
• Deferred-tax journal entries and financial-statement presentation
• Comprehensive problems and exam-style applications
WHO THIS COURSE IS FOR
• Undergraduate and graduate students taking Intermediate Accounting
• Accounting students studying the Accounting for Income Taxes chapter
• CPA candidates preparing for Financial Accounting and Reporting (FAR)
• CMA candidates reviewing external financial reporting
• Accounting professionals refreshing deferred-tax concepts
• Learners searching for a complete deferred tax course online
FREQUENTLY ASKED QUESTIONS
What is accounting for income taxes?
Accounting for income taxes explains how an entity reports current income taxes payable and the future tax effects of differences between financial accounting and tax accounting.
What is a deferred tax asset?
A deferred tax asset represents a future tax benefit. It generally arises from a deductible temporary difference or a carryforward that may reduce taxable income or taxes payable in a future period.
What is a deferred tax liability?
A deferred tax liability represents a future taxable amount. It generally arises from a taxable temporary difference that is expected to increase taxable income in a future period.
What causes deferred tax assets and liabilities?
They arise when the financial-statement carrying amount of an asset or liability differs from its tax basis and that difference is expected to reverse in a future period.
What is a temporary difference?
A temporary difference is a difference between an item’s book carrying amount and tax basis that will reverse or be recovered or settled in a future period.
What is the difference between a temporary and permanent difference?
A temporary difference reverses in a future period and can create a deferred tax asset or liability. A permanent difference never reverses and therefore does not create deferred taxes.
What is a deductible temporary difference?
A deductible temporary difference is expected to produce a future tax deduction and generally creates a deferred tax asset.
What is a taxable temporary difference?
A taxable temporary difference is expected to produce taxable income in a future period and generally creates a deferred tax liability.
What is a deferred tax asset valuation allowance?
A valuation allowance reduces a deferred tax asset when, based on available evidence, it is more likely than not that some portion or all of the asset will not be realized.
Which tax rate is used to measure deferred taxes?
Deferred taxes are measured using enacted tax rates expected to apply when the related temporary differences reverse.
What is the difference between income tax expense and income taxes payable?
Income taxes payable is the current tax obligation based on taxable income. Income tax expense reflects both the current tax amount and changes in deferred tax assets and liabilities.
Are deferred tax assets and liabilities tested on CPA FAR?
Yes. CPA FAR candidates should understand temporary differences, DTAs, DTLs, valuation allowances, tax-rate changes, journal entries, and financial-statement presentation.
Are deferred taxes covered on the CMA Exam?
Yes. CMA candidates may encounter income-tax accounting within external financial reporting and financial-statement analysis.
How should I use this course?
Begin with the introduction to book and tax differences, then follow the manually ordered lessons through deferred tax liabilities, deferred tax assets, valuation allowances, and comprehensive applications. Work each calculation and journal entry before watching the solution.
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