To help you become familiar with the accounting standards, this case is designed to take you to the FASB’s Web site and have you access various publications. Access the FASB’s Web site at www.fasb.org. Click on “FASB Pronouncements.”
In this chapter, we discussed the accounting for income taxes. For this case, we will use Statement of Financial Accounting Standards No.109,“Accounting for Income Taxes.” Open FASB Statement No. 109.
1. Paragraph 6 details two objectives of accounting for income taxes. What are those two objectives?
2. In paragraph 16, total income tax expense (or benefit) for a period is broken into two parts. What are those two parts?
3. Paragraph 17 discusses the valuation allowance associated with deferred tax assets. What is the objective of the valuation allowance?