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Deferred Tax Assets, Post-retirement Benefit Obligation

1. (TCO 1) How are deferred tax assets arising from net operating loss carryforwards classified under SFAS 109?

2. (TC0 2/3) What is different about the expected postretirement benefit obligation and the accumulated postretirement benefit obligation?

3. (TCO 4) What is comprehensive income and how does it differ from net income? Where is it reported in the balance sheet?

Solution Preview

1. SFAS requires deferred tax assets to be provided in accordance with either the temporary difference or timing difference approach. According to SFAS 109, a temporary difference approach is adopted to classify deferred tax assets. Deferred tax assets are recognized for recognition for deductible temporary differences and operating losses and tax credit carryforwards.

Statement 109 says, deferred tax assets are recognized for deductibles and carry-forwards under the presumption they would be realized, subject to an impairment test.

For example
1. The difference between warranty expense for financial reporting and ...

Solution Summary

Deferred tax assets for post-retirement benefit obligations are examined.