Deferred Tax Essay Example

Deferred Tax Essay Example Deferred Tax Essay Deferred Tax Essay Financial statements The article Its time to simplify tax financial reporting was written by Terry J. Ward in the year 1996. The article was published on November 11 in the Audit and Accounting Forum section in the newspaper the Accounting Today. It focuses on controversies that surrounded the reporting of income tax on financial statements. For example, in early 1950, there was an argument that suggested that companies should allocate an amount of income tax expense across accounting periods to account for timing differences between reported and taxable income. The Financial Accounting Standards Board issued Statement 109 that required assets and liabilities to interperiod income tax allocation (Ward, 1996). The statement was not operational because one could neither verify nor disprove any revenue tax distribution and it was not useful to investors or lenders. Studies have shown that deferred tax allocation reduces the usefulness of accounting information because it violates the costs and benefits cons train principles. The Flow-through approach is simple and saves companies the additional record keeping cost associated with deferred tax allocation (Ward, 1996). Reporting of income tax should be simplified, useful to all parties that use and meet all the standards of the FASB. The reporting of income tax should me be simplified (Ward, 1996). Reporting deferred tax in the financial statement is not simple because of it is complex and not logic to estimate taxable or deductible amount in future years. For example, only deferred tax expense is presented in the Income Statement while in the Balance Sheet two categories are presented that is net current and net non-current amount. Moreover, it not logic to use losses of past years to offset the profit of another year as per the use of loss carryback and loss carryforward. Therefore, a person cannot tell what the future holds only God knows. Estimate the net operating loss is difficult because two years are carried back and twenty years are passed forward. Deferred tax violates the cost and benefit constraints standards of the FASB (Ward, 1996). Tax benefit realization will be limited if loses carried back or carried forward period is brief. Moreover, if the significant deductible temporary difference is expected to reverse in a single year or when the enterprise operates in a traditionally cyclical business, these factors will also limit the realization of tax benefit. Additionally, the unsettled circumstances that are unfavorably resolved will adversely affect the forthcoming operation and profit level on continuing basis in the future. Financial reporting Accounting for income tax is not of any importance to its various users especially the lenders and investors (Ward, 1996). Creditors and investors are not interested in the future information of the company but are rather interested in how the firm has been and is performing in their decision making. Moreover, core aspects are left behind while computing the income tax. For example, according to IFRS, some potential liabilities are not recognized whereas, GAAP uses an impairment approach for deferred tax asset. Also, it is hard for some uninformed investors or lenders to understand the deferred tax while presented in the various books of record. I agree with the writers opinion that financial reporting should be simplified. Simplified financial reporting will ensure that people are able to compute and understand the financial information. Different approaches should be established to protect the various firms in the industry. For example, small companies should use the simplest method available. I believe when reporting financial information relevant information concerning the business should be presented to the appropriate people as per the FASB principles. References Ward, J. T. (1996 November 11). Its time to simplify tax financial reporting. Accounting Today. Page 18-19

Colleges Where 75% of Students Score 30 - 36 on the ACT

Colleges Where 75% of Students Score 30 - 36 on the ACT When youre considering to which college or university to apply, sometimes its helpful to browse through schools who have students scoring similarly on the ACT as you did. If your ACT scores are completely lower or higher than 75% of the students who were accepted to a particular school, perhaps youd be better off searching for a school where students are more in your range, although exceptions are certainly made all the time. This is a list of colleges and universities where 75% of the accepted students scored above or at a 30 - 36 composite score on the ACT. What does this mean? The following schools are accepting students who are scoring at the top of the ACT range! If you have scored between 30 – 36 and all your other credentials fit – GPA, extracurricular activities, recommendation letters, etc. – then perhaps one of these schools would be a good fit. Please keep in mind that this list is for the composite ACT score – youll see ACT scores a bit lower on particular sections (English, Mathematics, Reading, Science Reasoning), but the composite scores are always between 30 - 36. More ACT Score Information How to Understand Score PercentilesAverage National ACT ScoresACT Scoring 101: Scaled Vs. Raw 1. Amherst College Amherst, MassachusettsWebsite: amherst.edu ACT Composite: 25th Percentile: 3075th Percentile: 34 2. Bowdoin College Brunswick, MaineWebsite: bowdoin.edu ACT Composite: 25th Percentile: 3175th Percentile: 33 3. California Institute of Technology Pasadena, CaliforniaWebsite: caltech.edu ACT Composite: 25th Percentile: 3375th Percentile: 35 4. Colgate University Hamilton, New YorkWebsite: coldgate.edu ACT Composite: 25th Percentile: 3075th Percentile: 32 5. Columbia University New York, New YorkWebsite: columbia.edu ACT Composite: 25th Percentile: 3275th Percentile: 35 6. Cornell University Ithaca, New YorkWebsite: cornell.edu ACT Composite: 25th Percentile: 3075th Percentile: 33 7. Dartmouth College Hanover, New HampshireWebsite: dartmouth.edu ACT Composite: 25th Percentile: 3075th Percentile: 34 8. Duke University Durham, North CarolinaWebsite: duke.edu ACT Composite: 25th Percentile: 3075th Percentile: 34 9. Franklin W. Olin College of Engineering Needham, MassachusettsWebsite: olin.edu ACT Composite: 25th Percentile: 3375th Percentile: 34 10. Harvard University Cambridge, MassachusettsWebsite: harvard.edu ACT Composite: 25th Percentile: 3275th Percentile: 35 11. Harvey Mudd College Claremont, CaliforniaWebsite: hmc.edu ACT Composite: 25th Percentile: 3375th Percentile: 35 12. Johns Hopkins University Baltimore, MarylandWebsite: jhu.edu ACT Composite: 25th Percentile: 3075th Percentile: 33 13. Massachusetts Institute of Technology Cambridge, MassachusettsWebsite: http://web.mit.edu/student/ ACT Composite: 25th Percentile: 3275th Percentile: 35 14. Middlebury College Middlebury, Vermont Website: middlebury.edu ACT Composite: 25th Percentile: 3075th Percentile: 33 15. Northwestern University Evanston, IllinoisWebsite: northwestern.edu ACT Composite: 25th Percentile: 3175th Percentile: 34 16. Princeton University Princeton, New JerseyWebsite: princeton.edu ACT Composite: 25th Percentile: 3175th Percentile: 35 17. Rice University Houston, TexasWebsite: rice.edu ACT Composite: 25th Percentile: 3075th Percentile: 34 18. Stanford University Stanford, CaliforniaWebsite: stanford.edu ACT Composite: 25th Percentile: 3175th Percentile: 34 19. Swarthmore College Swarthmore, PennsylvaniaWebsite: swarthmore.edu ACT Composite: 25th Percentile: 3075th Percentile: 33 20. Tufts University Medford, MassachusettsWebsite: tufts.edu ACT Composite: 25th Percentile: 3075th Percentile: 33 21. University of Chicago Chicago, IllinoisWebsite: uchicago.edu ACT Composite: 25th Percentile: 3175th Percentile: 34 22. University of Notre Dame Notre Dame, IndianaWebsite: nd.edu ACT Composite: 25th Percentile: 3175th Percentile: 34 23. University of Pennsylvania Philadelphia, PennsylvaniaWebsite: upenn.edu ACT Composite: 25th Percentile: 3075th Percentile: 34 24. Vanderbilt University Nashville, TennesseeWebsite: vanderbilt.edu ACT Composite: 25th Percentile: 3275th Percentile: 34 25. Washington University in St. Louis Saint Louis, MissouriWebsite: wustl.edu ACT Composite: 25th Percentile: 3275th Percentile: 34 26. Williams College Williamstown, MassachusettsWebsite: williams.edu ACT Composite: 25th Percentile: 3075th Percentile: 34 27. Yale University New Haven, ConnecticutWebsite: yale.edu ACT Composite: 25th Percentile: 3175th Percentile: 35