Need to write a memo that describing the change in focus from the income statement to the balance sheet. Describe the concepts of permanent and temporary differences. Give two examples of each and how they reflect the new focus.
The issue of SFAS No. 109, the framework now used in accounting for income taxes.
(can use the FASB website to view the official pronounce at http://www.fasb.org/pdf/aop_FAS109.pdf or the summary at http://www.fasb.org/st/summary/stsum109.shtml )
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You are right. Taxing future income puts burden on the current operations of a company.
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Below are my answers.
Anna Liza Gaspar
Date: May 2, 2009
Subject: Changes Resulting from SFAS No. 109 - Accounting for Income Taxes
The Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, establishes accounting procedures and policies for income and thus, amends previous financial accounting standards on income taxes (e.g., FASB Statement No. 96).
SFAS No. 109 applies the ...
This solution of 445 words prepares a memorandum on changes resulting from SFAS no.109 where it lists the types of differences applied to the shift from income statement to balance sheet.