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Basic Question 4 of 20
True or False?
II. A company's tax expense is the tax return liability resulting from current period taxable income.
I. Accounting profit includes a provision for income tax expense.
II. A company's tax expense is the tax return liability resulting from current period taxable income.
User Contributed Comments 4
| User | Comment |
|---|---|
| poomie83 | 1. NPAT is the profit after provision for tax 2. wouldn't the taxable income lead to tax expense? |
| johntan1979 | Nope. Get your terms right. Accounting profit --- tax expense Taxable income --- tax payable |
| johntan1979 | Tax expense = Taxes payable + DTL Taxable income = Pretax income + Temporary differences creating DTA - Temporary differences creating DTL Taxable income = Pretax income - Accounting depreciation - Tax depreciation |
| Omosewa | Taxable income= Pretax income + Accounting depreciation - Tax depreciation |
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Learning Outcome Statements
explain how deferred tax liabilities and assets are created and the factors that determine how a company's deferred tax liabilities and assets should be treated for the purposes of financial analysis
CFA® 2025 Level I Curriculum, Volume 3, Module 9.