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Why is the tax expense reported on the income statement comprised of current and deferred tax?

In: Income Taxes [Edit categories]

Answer:

This is in accordance with Generally Accepted Accounting Principles, SFAS No. 109, "Accounting for Income Taxes".

The theory is that even if you don't owe tax today on a given temporary difference, you will one day owe (or get the tax benefit) of said temporary difference.

Remember: current tax expense= your tax bill this year

deferred tax expense/ benefit=your future tax expense or benefit on the book/tax temporary items

First answer by ID1442508851. Last edit by ID1442508851. Question popularity: 0 [recommend question].

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