About Lesson
LOS I requires us to:
analyze disclosures relating to deferred tax items and the effective tax rate reconciliation and explain how information included in these disclosures affects a company’s financial statements and financial ratios.
Following deferred tax information is disclosed typically:
a. Deferred tax assets/liabilities, valuation allowance, and net change in valuation allowance during the period.
b. Any unrecognized deferred tax liability for undistributed earnings of subsidiaries and joint ventures.
c. Current year’s tax effect of each type of temporary difference.
d. Components of income tax expense.
e. Reconciliation of reported income tax expense and tax expense based on statutory rate.
f. Tax loss carryforwards and credits.