Analysis of Income Taxes
Free CFA Level I lesson in Financial Statement Analysis. 15 min read, ~2,260 words.
Accounting profit follows GAAP/IFRS; taxable income follows the tax code. Income tax expense = taxes payable + change in DTL − change in DTA. Temporary differences reverse and create DTL/DTA. Permanent differences never reverse and only affect the effective tax rate. DTL when book income exceeds taxable income (deferred outflow)...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- analysis of income taxes
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