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Discussion:GAAP Disclosure - Tax Provision

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Discussion Forum Index --> Accounting Questions --> GAAP Disclosure - Tax Provision


Jeff-Ohio (talk|edits) said:

15 March 2012
When a C-Corp has an NOL carryforward that will provide a future tax benefit, is there any 'special' reporting disclosure requirements? Or is it just 'it is what it is'. Are we suppose to 'assume' the corp will have income in the future where this NOL will be utliized? A bank isn't going to loan a corp money or not loan a corp money based on a federal tax prosision. Just unsure of the proper reporting and I've exhausted the GAAP book. Thanks

EmpireCPA (talk|edits) said:

15 March 2012
Jeff, any deferred tax assets are subject to a valuation allowance based on expected future results. See ASC 740-10-30-5. If you expect taxable income (before NOL carryforward) to exceed the NOL in future years, then the deferred tax asset should equal the NOL times the expected tax rate during the future periods of profit. The balance sheet should reflect the net deferred tax position. The footnote should disclose gross deferred tax assets, liabilities and the estimated future tax rate used to determine them. See ASC 740-10-55 for implementation guidance.

UpstateCPA (talk|edits) said:

15 March 2012
In addition to the deferred tax benefit, I usually disclose the amount of the NOL available to offset future income and when the NOL's begin to expire.

Jeff-Ohio (talk|edits) said:

15 March 2012
Thank you kindly, Upstate.

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