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    This addresses taxable & financial income & deferred assets.

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    1. Why are there differences between taxable and financial income? What are some examples of permanent and temporary differences? Why do these differences exist? How do they affect the financial statements?

    2. How are deferred tax assets and deferred tax liabilities derived? How do they relate to the difference between tax expense and taxes payable? How could an organization have a tax receivable? Why is the tax expense reported on the income statement comprised of current and deferred tax?

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    https://brainmass.com/business/accounting-for-liabilities/this-addresses-taxable-financial-income-deferred-assets-475031

    Solution Preview

    (1) There are differences between taxable and financial income because financial income is the amount that is used for investor analysis, whereas taxable income is the amount of income reported to the IRS that is considered taxable. A temporary difference would be calculating depreciation under one method for book purposes and under another method for tax purposes. A permanent difference would result from a company acquiring another company at above or below cost, causing a permanent loss/gain ...

    Solution Summary

    The solution thoroughly answers each question presented regarding the differences between taxable and financial income, and how deferred tax assets and deferred tax liabilities are derived, along with explaining all related issues to both questions presented.

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