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Memo: Income Statement Change to Balance Sheet

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 )

Thank you

Solution Preview

Thoughts:
You are right. Taxing future income puts burden on the current operations of a company.
If you want a more detailed answer, please create another question for this. (Note: This is not covered by the original question).

Dear Student,

Thank you for using BM.
Below are my answers.

Sincerely,
Anna Liza Gaspar

ANSWERS

MEMORANDUM

Date: May 2, 2009
To:
From:
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 ...

Solution Summary

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.

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