Accounting for Income Taxes – A Timely Refresher and Update

This 90-minute webinar covers the following topics:

• The balance sheet approach to accounting for income taxes
• The handling (from creation to write-off) of deferred tax assets and deferred tax liabilities
• Need for a valuation account in certain circumstances
• Specific examples of differences – temporary and permanent
• Special topics such as accounting for net operating losses, multiple tax rates etc.
• AMT

Attendees will learn the following:

• The historical problems associated with accounting for income taxes.
• How the balance sheet approach dramatically changed income tax accounting.
• The fundamentals surrounding the accounting for income taxes.
• Future activities and their impact on deferred tax assets and/or liabilities.
• The different handling of temporary differences and permanent differences.
• The creation of deferred tax balance sheet accounts.
• Need for a valuation account when it is more likely than not that the net deferred tax asset will not be realized in full.
• Basic provisions of SFAS 109 (ASC 740-10).

Topic area covered include:

• Accounting for current provision
• Accounting for deferred provision
• Temporary difference and how they “turn around” or reverse
• Permanent difference and how they are ignored for deferred tax purposes
• Net operating losses – carry backs, carry forwards
• Tax rate considerations
• Future rates/revisions of future rates
• Special issues
• Multiple temporary differences
• Multiple tax rates
• AMT
• Intra-period tax allocation

Attendees will take away valuable information such as:

• Knowledge of the balance sheet approach for accounting for income taxes.
• An historical accounting for why the profession changed from an income statement approach to the balance sheet approach.
• A complete understanding of what are deferred tax assets and deferred tax liabilities.
• A grasp of the difference between temporary differences and permanent differences.
• Circumstances that require use of a valuation account.

• Senior bank management
• Selected directors on the Board
• Controllership personnel
• Audit committee members
• Internal auditors
• External auditors
• Primary regulators
• Risk managers
• Financial statement preparers

Paul J. Sanchez, CPA, CBA, CFSA, CGMA conducts a small CPA practice in Port Washington, New York. He is also the owner of Professional Service Associates (PSA), a consulting and professional training and development business servicing corporate clients (auditors, controllers, etc.), CPA firms, professional associations and others. He was an assistant professor at Long Island University - C.W. Post Campus as well as an adjunct lecturer at City University of New York. Prior to starting PSA, he was the Vice President-Professional Development for the Audit Division of a regional bank and Director of Professional Practices and Vice President of a money-center bank, where he directed the professional practice development and training for internal auditors. He also was on the technical staff of the Auditing Standards and Examinations Divisions of the AICPA. He practiced public accounting in the New York office of Deloitte where he also was a firm recruiter and in-house professional development instructor. He was an owner and auditing and accounting seminar leader for the Person/Wolinsky CPA Review Courses, a company that prepared candidates to pass the Uniform CPA Examination. He is a frequent lecturer and seminar leader for accounting, auditing, banking, risk assessment and other professional presentations. He is the author of the textbook, “Accounting Basics for Community Financial Institutions” (Financial Managers Society, 2nd edition, Chicago, 2009) and the “Ideas an Analysis Letter: The Sanchez Take” (see www.sanchez-psa.com). As a contributing author, his chapter on ‘An Auditor’s Approach to Risk-Based Auditing: What to Audit and When,’ is included in the textbook, “Effective Auditing for Corporates: Key Developments in Practice and Procedures,” (Bloomsbury Information, Ltd, London, 2012).