Page 50 - FINAL CFA I SLIDES JUNE 2019 DAY 8
P. 50
Session Unit 8:
30. Income Taxes
LOS 30.i: 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, p.258
IFRS/US GAAP requires full disclosure of the sources of temporary differences that cause DTL and DTA
• DTL from Accelerated (for tax) versus straight line depreciation (for income statement);
• DTA from impairments as write-down is not accepted as deduction for tax purposes;
tanties
• DTA from restructuring as costs are recognised in reporting when announced but not
deducted until paid;
Required disclosures:
• DTL, DTA, any valuation allowance, and the net change over the period.
• Current-year tax effect of each type of temporary difference.
• Any unrecognized deferred tax liability for undistributed earnings of subsidiaries and JVs.
• Components of income tax expense.
• Reconciliation of reported income tax expense and the tax expense based on the statutory
• Tax loss carry-forwards and credits.
