Lecture Details

Accounting for income taxes ch 19 p 1-Intermediate Accounting CPA exam

Intermediate Accounting by Keiso


Chapter 19 addresses the issues related to accounting for income taxes. Taxable income is computed in accordance with prescribed tax regulations and rules, whereas accounting income is measured in accordance with generally accepted accounting principles.  Due to the fact that tax regulations and generally accepted accounting principles differ in many ways, taxable income and financial income frequently differ. Examples of events that can result in such differences include: (a) depreciation computed on a straight-line basis for financial reporting purposes and on an accelerated basis for tax purposes, (b) income recognized on the accrual basis for financial reporting purposes and on the installment basis for tax purposes, and (c) warranty costs recognized in the period incurred for financial reporting purposes and when they are paid for tax purposes.