The Computation of the Taxable Income

Abstract

US GAAP takes an asset-liability approach to accounting for income taxes and thus records deferred tax assets and liabilities. A deferred tax liability or asset generally should be recognized for the future tax effects of all temporary differences and carryforward. Deferred taxes are calculated using the asset or liability approach, which is intended to recognize, in the balance sheet, the future tax consequences of events that have been either recognized in the financial statements or the tax return. Accounting Standards Update 2015–2017 requires that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position (Balance sheet).