Analysis of Income Taxes

Which term describes the income subject to tax based on the tax return?

What represents the net amount of an asset or liability as per the tax book?

Which of the following equations correctly represents the calculation of Income Tax Expense?

When the Carrying Value of an asset is greater than its Tax Base, what is created?

Which scenario results in the creation of a Deferred Tax Asset (DTA)?

In the example provided in the text (Fruit 2), a company has Sales of 100 and Tax Depreciation of 50, but Book Depreciation of 25. If the tax rate is 40 percent, what is the Taxes Payable?

Using the same example (Fruit 2), where Book Depreciation is 25 and Tax Depreciation is 50 with a 40 percent tax rate, what is the Deferred Tax Liability (DTL) created in Year 1?

How does a permanent difference affect the financial statements?

If income tax rates increase, what happens to existing Deferred Tax Assets (DTA) and Deferred Tax Liabilities (DTL)?

What is a Valuation Allowance?

How does increasing the Valuation Allowance affect a company's earnings?

Under IFRS, how are Deferred Tax Assets and Liabilities classified on the balance sheet?

Which of the following creates a Deferred Tax Liability (DTL)?

According to the provided text, how does US GAAP classify DTA/DTL on the balance sheet?

What is the effect of a tax loss carryforward?

If a Deferred Tax Liability is not expected to reverse, how should an analyst treat it?

Which difference generates a Deferred Tax Asset?

Consider a company with Pretax Income of 100 and Taxable Income of 80. If the tax rate is 30 percent, what is the change in Deferred Tax Liability (assuming no DTA)?

What characterizes a Permanent Difference?

How is the 'Cash Tax Rate' calculated?

What happens if a company decreases its Valuation Allowance?

Which item requires disclosure regarding deferred taxes?

If the Carrying Value of a Liability is less than its Tax Base, what is the result?

A firm has a Deferred Tax Liability of 100. If the tax rate decreases by 10 percent (relative terms, e.g., from 40 percent to 36 percent), what happens to the DTL?

What is the 'Statutory Tax Rate'?

Which of the following is treated as a temporary difference?

If a company has a Net Deferred Tax Asset of 500 and creates a Valuation Allowance of 100, what is the impact on the Balance Sheet carrying value of the DTA?

In the context of Deferred Tax calculation, what does 'CV' stand for?

If a Deferred Tax Liability reverses, what is the effect on Tax Payable compared to Tax Expense in that year?

Which condition leads to a DTL regarding Expenses?

What does a Valuation Allowance of zero imply?

If taxes payable are 40 and the DTA increases by 10 (with no change in DTL), what is the Income Tax Expense?

If a company has a Statutory Tax Rate of 30 percent and reports an Effective Tax Rate of 25 percent, what is the most likely cause?

What is the 'Tax base' of an asset?

When forecasting, if a DTL is expected to grow indefinitely (e.g., due to continuous growth in capex), it acts most like:

What is the impact of a lower tax rate on the Income Statement in the year of change?

If Taxable Income is 200, Accounting Profit is 300, and the tax rate is 25 percent, what is the Deferred Tax Liability created?

Which of the following creates a Deferred Tax Asset regarding Revenue?

Fruit 7 lists 'Net change in valuation allowance' as a disclosure. Why is this important?

Which statement about IFRS and US GAAP differences for deferred taxes is correct based on the provided text?

If a company has 100 in DTL and the tax rate rises from 20 percent to 30 percent, what is the adjustment to the DTL?

What creates a Taxable Temporary Difference?

If income tax expense is 100 and deferred tax liabilities increased by 20 (with no DTA), what was the Taxes Payable?

Under US GAAP (per the text), if a DTA relates to a current asset, how is it classified?

Which of the following creates a Deferred Tax Liability (DTL)?

When is a Valuation Allowance created?

What is the relationship between Pretax Income and Taxable Income that results in a Deferred Tax Asset?

How does inflation generally affect the effective tax rate compared to the statutory rate?

Which ratio compares the Income Tax Expense to Pretax Income?

If a company has a Net DTL of 200 and Net DTA of 50, what is the net reported position under IFRS?