在开始这个课程之前，我建议你先完成另一门我所受教的课“财务会计导论”。在这个课程中，你会学到如何根据公司提供的资料，阅读、理解、分析一个公司的财务状况。这些技能能让你运用财务信息作出更好的决定。
Video 8.2.2: Deferred Tax Assets and Tax Rate Changes
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來自 University of Pennsylvania 的課程
财务会计导论续篇
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從本節課中
Week 8: Deferred Taxes
There are two certainties in life, and we will cover one of them this week (the other is beyond the scope of the course). We will NOT teach you how to prepare your own tax return. Instead, we will discuss how companies have to prepare "two sets of books": their financial statements and their tax returns. The rules are different for these two sets of books, leading to permanent differences and to temporary differences. We will cover both types of differences, with a main focus on "deferred taxes", which are the byproduct of temporary or timing differences between tax reporting and financial reporting. Finally, we will touch on other tax issues, such as Net Operating Loss Carryforwards and the rule that requires companies to disclose how much they are trying to cheat on their taxes (sorry, that should say "use tax planning strategies to manage their taxable income").
與講師見面
Brian J BusheeThe Geoffrey T. Boisi Professor
Accounting
Hello, I'm professor Brian Bushee, and welcome back.
This is part two of our look at
how temporary differences create deferred tax assets and deferred tax liabilities.
It's deferred tax assets' turn, so we're going to go over that.
Plus, as a bonus feature, we'll show you what happens when the tax rate changes.
Let's get started.
Now we're going to
continue our look at temporary differences with deferred tax assets.
So, deferred tax assets arise from temporary differences where,
initially, tax rules require smaller expenses or bigger revenues than GAAP.
So again, at the beginning of the transaction that
creates the temporary difference, you initially have smaller expenses or
bigger revenues on the tax return.
Which means that pre-tax income is going to be less than taxable income,
where you have the smaller expenses or bigger revenue, and
if we have less pre-tax income, we must have less income tax expense.
because again, both income numbers get multiplied by 35%,
so income tax expense is less than income taxes payable.
We're going to create a def, deferred tax asset, which is going to
represent the benefit of tax savings that we're going to get in the future.
So, the way the journal entry would look is,
we debit income tax expense and, again, just making up numbers.
Let's make up 90 for income tax expense.
We know that's less than income taxes payable.
So we credit income taxes payable for 100, again making up numbers.
To get this to balance, we create a deferred tax asset, of 10,
that represents the fact that we paid more taxes to the government today,
but those extra payments are going to get us tax savings in the future.
The deferred tax asset is the benefit of those tax savings.
So in the future, GAAP rules will require smaller expenses or
bigger revenues than the tax rules, which means that in
the future our pretax income will be greater than our taxable income.
Income tax expense will be greater than income taxes payable, and
when we look at the journal entry,
we're going to debit income tax expense for, again, let's say 100.
Credit income tax payable for
90, because income tax expense is greater than income tax payable.
To balance this, we need an extra credit.
That extra credit is a credit to deferred tax asset of ten,
and notice what that does is it reverses out the temporary difference.
The deferred tax asset goes to zero once we get the benefit of those $10 of
tax savings.
>> What are you girls doing after the video today?
There is a great virtual shop near here.
It has the best virtual half-caf skim caramel macchiato in cyberspace.
>> Excuse me,
but the professor is in the middle of teaching us about deferred tax assets.
And it looks like that all he did was take the deferred tax liability slide and
change the less-than signs to greater-than signs, and vice versa.
>> Wow, I've had trouble with students paying attention in class before but
I haven't had any problems with virtual students yet.
Those brothers are always causing trouble.
anyway, yeah, the, Julie's right that this deferred tax
asset mechanics is going to be just like the mechanics that we've seen for
deferred tax liabilities, except the initial condition is reversed.
So you could almost take the last video, turn it upside down,
hold it in the mirror and everything should work from there.
Okay, let's look at an example of a deferred tax asset.
So, Brey company recognizes $80,000 of bad debt expense on sales made during 2010.
There were no write-offs of those sales in 2010, so
no accounts had to be written off.
In 2011, Brey wrote off $30,000 of the accounts as uncollectable, and
in 2012, Brey wrote off $50,000 of accounts as uncollectable.
So first, on the financial statements, if you remember,
we have to use the allowance method,
where we recognize bad debt expense in the same period that we make the sales.
So let's say in 2010 we have EBTBD, EBTBD earnings before taxes and
bad debt expense, which is an acronym that you can not pronounce.
We have EBTBD of 100,000.
Bad debt expense is 80,000.
So a 100 minus 80,000 gives us pretax income of 20,000.
We take that times the 35% tax rate, and income tax expense will be 7,000.
Then if you remember earlier in the course we talked about, for
tax purposes, you use the direct write-off method.
Which means that you recognize bad debt expense for
tax purposes when you actually write off the accounts, not when you make the sales.
So, assuming the same EBTBD, earnings before taxes and bad debts of 100,000,
there's no bad debt expense because nothing was written off.
Our taxable income is 100,000, times 35% gives us income tax payable of $35,000.
So why don't you try to do the journal entry in 2010 for
the income tax expense and the income tax payable.
I'll go ahead and throw up the pause sign.
Okay, so we start with income tax expense, of 7,000, that gets debited,
that's going to show up on the income statement.
We credit income tax payable for 35,000, so
this represents the liability to pay the government $35,000 of taxes.
Our debits don't equal our credits.
What we need to do is debit a deferred tax asset for 28,000.
That deferred tax asset, which sits on the debit side of a T account, represents
the future tax savings that we're going to get based on this transaction.
So this year we paid an extra 28,000 of taxes versus what's on the books.
At some point in the future this will reverse, and
we'll get 28,000 worth of tax savings.
>> How is this an asset?
The company just paid a ton of taxes.
That sounds like bad news to me.
Not an asset.
>> They are almost as bad at tax planning as you are.
Loser.
>> Wow, settle down, settle down.
So, don't think of this deferred tax asset as reflecting good news or
reflecting bad news.
Just think of it as, it is was it is.
It reflects future tax savings that you're entitled to because you had to
pay extra taxes this period because of the differences between the tax rules and
accounting rules.
So, the deferred tax asset represents these future tax savings,
which makes it an asset.
So then in 2011, we're going to assume Brey Company has
the same earnings before taxes and bad debt of 100,000.
They have no bad debt expense in 2011, which means that their pre-taxes income
is also 100,000 times 35% as they end up paying income tax expense of 35,000.
>> This simply does not make any sense.
How could a company have zero bad debt expense in a year?
>> In Hong Kong, we would suspect the company was doing fraudulent reporting if
we saw zero bad debt expense.
>> Yes, of course, a company is going to have bad debt
expense every year because it's going to make new sales every year.
What I'm doing in this example is I'm simply following only the 2010 sales.
So the sales that we made in 2010 will only have bad debt expense in year one,
and then there will be no bad debt expense after that.
And then we'll follow the write-offs of those sales in 2010.
So yeah, in the real world, layered on top of this would be new sales in 2011 and
new sales in 2012, which would have new bad debt expense.
But to really highlight the temporary difference in the deferred tax asset,
I'm just going to follow only the sales made in 2010 and
all the implications of those sales for bad debt and for write-offs.
So continuing on, in the tax method on the right hand side, we're going to
assume the same $100,000 of taxable income before bad debt expense and taxes.
Now bad debt expense is 30,000 because that's how much in accounts that Brey
wrote off in 2011, that gives a taxable income of 70,000, 100 minus 30.
We take that 70,000 times 35% and you get income tax payable of 24,500.
So I'll put up the pause sign and try to do the journal entry for
income tax expense and income tax payable in 2011.
So we're going to debit income tax expense for
35,000, that's what goes on the income statement.
We credit income tax payable for 24,500.
That is going to be what we owe the government.
And we have to credit deferred tax asset for 10,500 to make this balance.
So, already, the temporary difference is starting to reverse.
So we end up having a credit entry to the deferred tax asset account,
which means at the end of 2011,
we still have about 17,500 of deferred tax assets left, future tax savings.
Then in 2012, we have the same 100,000 earnings before taxes and
bad debts since we're going to assume, again,
no bad debt expense based on the original sales in 2010.
Pre-tax income is 100,000 times 35%, again, is 35,000 of income tax expense.
On the tax return, we're going to have 50,000 of bad debt expense because we
wrote off 50,000 of accounts.
So the direct write-off method is,
when we write-off the accounts, that's when the expense shows up.
Gives us taxable income of 50,000, times 35% gives us income tax payable of 17,500.
Why don't you go ahead and try to do the journal entry for income tax expense and
income tax payable in 2012.
Okay, so we're going to debit income tax suspense for
35,000, credit income tax payable for 17,500, that's what we owe the government.
To make this balanced, we credit deferred tax asset for 17,500.
And if we look at the T account, that zeroes out the deferred tax asset.
So this temporary difference has fully reversed, and so
the deferred tax asset has gone to 0.
>> This is a really bad deal for the company.
They have to pay more taxes in 2010, but don't get all the tax savings until 2012.
>> Are there any other tax differences that require the use of
deferred tax assets?
>> Yes, there are other transactions that give rise to deferred tax assets, and
in fact, deferred tax assets are probably more common than deferred tax liabilities.
So, it's not all about getting those tax savings that we saw with depreciation.
So, some items that also generate these kind of deferred tax assets include
punching benefits and other employee, other employee benefits warranties,
inventory methods between FIFO and weighted average could cause this.
Acquisitions of am, of intangible assets and
the difference in amortization schedules could cause deferred tax assets.
And, these animals called non-operating loss carry forwards,
which we're going to see in a subsequent video.
'Kay, and
just to summarize this example, on the books, we had a total of 80,000 for
bad debt expense and a total income tax expense of 77,000.
On the tax return, same total for
bad debt expense, same total for income tax payable.
Again, it's a classic timing difference, where the timing of bad debt expense and
tax expense is shifted across time, but the totals are the same between books and
taxes over the life for
the transaction, which in this case is from the time the sales were
made until the final write-offs were made on ones that were uncollectable.
Now we're going to throw a little bit of wrench in the calculation for deferred
tax assets and deferred tax liabilities, and that is changes in future tax rates.
So, deferred tax assets and
liabilities must be based on expected future tax rates.
And we've been assuming so far is that whatever the current rate is, 35%,
will continue on into the future.
But, if the government changes the statutory tax rate, the balances in
deferred tax assets and deferred tax liabilities must be adjusted to
reflect the new rate, with the adjustment running through income tax expense.
So, for instance, if the government increased the tax rate in the future,
what we will have to do is increase our deferred tax assets,
because now we're going to be saving taxes at a higher rate in the future.
We would de, debit deferred tax asset to increase the asset.
There's no cash involved in this, there's no income tax payable, so
we're going to credit income tax expense as the balancing entry,
and there'll be a one-time exp, hit to expense based on the tax rate increase.
If the tax rate up, went up, we'd also have to increase deferred tax liabilities.
To increase a liability, we'd have to credit deferred tax liability.
And here, we debit income tax expense to balance the entry.
If the tax rate went down, then our deferred tax assets would go down, so
we would credit deferred tax asset to reduce it, debiting income tax expense,
and our deferred tax liabilities would also go down if the tax rate went down.
So, to reduce the liability,
we would debit deferred tax liability and credit income tax expense.
>> Hey, where did everyone go?
Does this mean that some companies would be better off with a tax rate increase,
and some would be better off with a tax rate decrease?
>> Well, I think all companies would want to see tax rates come
down because they would pay less in taxes, overall.
But in terms of deferred tax assets and deferred tax liabilities,
there will be different winners or losers depending on the tax rate change for
these extra tax savings or extra tax payments that companies have to make.
So if the tax rate goes up, then it's good news if you have deferred tax assets,
because your tax savings in the future will be saving you taxes at
a higher tax rate.
You're unhappy if you have deferred tax liabilities,
because you'll be paying back those extra taxes at a higher rate.
If you had a tax rate decrease, then it's the opposite.
You're not as well off with deferred tax assets.
Your tax savings will come at a lower rate in the future,
whereas you're better off with deferred tax liabilities because your
future tax payments will come at a lower tax rate.
We'll go through some examples to show you how this works.
So let's apply this to the Brey examples that we've been looking at.
First, we're going to go back to the Brey example for deferred tax liabilities.
This is where we had depreciation expense differing between the books and taxes.
And let's assume that at end of 2011 the government increases the tax rate to 40%.
So, where were we at the end of 2011?
The balance in deferred tax liabilities was 9,450.
Here's the T-account which assumed the 35% rate.
So we had the initial $14,000 creational liability.
In 2011, we paid back some of those deferred taxes.
And so now, the balance is 9,450 at the end of 2011.
The pre-tax difference that that represents is we take 9,450 divided by 35%
and that represents a $27,000 pre-tax difference between the taxes and
the books.
Where does that pre-tax difference come from?
If you look at accumulated depreciation on the books, it's 80,000.
If you look at accumulated depreciation on the tax return, it's 107,000.
The difference between those two is 27,000.
So, either you can look at the difference between the accumulated depreciations, or
what's usually easier is just take the deferred tax liability,
divide it by the old tax rate, 35%, to figure out the pre-tax difference.
Then, we multiply that pre-tax difference times the new tax rate.
So, we're going to have to pay those extra taxes in the future, not at 35%, but
at 40%, which means it's going to be 10,800 that we pay in the future.
So, the balance has to end up with 10,800 at the end of 2011 because of
the tax rate change.
So how do we get there?
The difference between 10,800 and 9,450 is 1,350.
So we're going to debit income tax expense by 1,350,
credit the deferred tax liability by 1,350 to increase it to the balance of 10,800,
and now at the end of 2011,
we have the deferred tax liability that represents the future tax payments at 40%.
And we have this extra income tax expense to make the adjustment.
>> Well, this does not make any sense.
Why would the company have to record an expense today when the higher taxes will
be paid in the future?
Shouldn't you just debit Accumulated Other Comprehensive Nonsense, or
something like that?
>> Actually, that's a great idea.
This kind of entry should be a debit to accumulated other comprehensive no,
I mean, accumulated other comprehensive income.
It is distorting the tax expense when this happens.
And so, what companies will do is any time there's a tax rate change and
they have these weird entries,
they'll often disclose that there was an unusual tax expense due to the change in
the rates, reflecting the re-valuation of their deferred taxes.
it's, the good news is the corporate tax rate doesn't change that often, so
you don't have to deal with these entries that often.
Now let's take a look at how this works with a deferred tax asset.
So we're going to go back to the Brey company example with bad debt expense,
where we had different methods for the books, which was the allowance method, and
taxes, which was the write-off method.
Again, at 2011,
the government decides to increase the tax rate to 40% at the end of the year.
So at this point, at the end of 2011, the balance in deferred tax assets is 17,500,
under the 35% rate, and there it is in the T account.
So we have to get the pre-tax difference, which is 17,000 divided by
the old tax rate, 35%, or $50,000, which, as you can see, is also the difference
between all the bad debt expense we've recognized so far in the books and
all the bad debt expense we've recognized in the books so far on the tax return.
Now the pretext difference is going to be multiplied times the new tax rate of 40%
to get the new deferred tax asset, which is 20,000.
So we need the balance to be 20,000 at the end of 2011.
How do we get it there?
Well,20,000 minus the old balance of 17,500 is 2,500.
So, we need to debit deferred tax asset by 2,500.
That debit will get the balance to where we need it to be.
And then, to balance this, we credit income tax expense 2,500,
we reduce the income tax expense, and in doing so, we've now got the deferred tax
asset balance to represent the balance the value of those future tax savings at 40%.
And to do that, we showed a one-time negative expense.
>> This looks like more fairy tale accounting.
Negative expense?
Seriously?
Can you really have a negative expense?
>> Yes, you can have a negative expense.
It's, it's essentially reducing what your income tax expense is,
and it's not the last time you're going to see this kind of
negative expense with tax accounting.
So, I've promised more negative expenses, and
we're going to see some in the next video when we look at this
thing called evaluation allowance, which we occasionally need to use for defer tax
assets when we don't think we're actually going to get those future tax savings.
Why wouldn't we get those future tax savings?
You'll have to join me next video to find out.
I'll see you then.
>> See you next video.
