Income Taxes

Free CPA FAR (Financial Accounting & Reporting) lesson in Select Transactions. 13 min read, ~1,891 words.

Temporary differences create DTAs/DTLs; permanent differences only affect the effective tax rate. DTL = future taxable amount (pay more later); DTA = future deductible amount (pay less later). Valuation allowance reduces DTAs when realization is not "more likely than not" ( 50%); a three-year cumulative loss is strong negative evidence...

What this lesson covers

• Content
• Example 1
• Example 2
• Common Mistakes
• Check Your Understanding
• Exam Shortcuts

Learning objectives

• III.A1
• III.B1
• III.C1
• III.D1
• III.E1
• III.F1
• III.G1

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