Real World Case 165 Disclosure issues; balance sheet classifications; Walmart

LO161, LO162, LO168

Real World Financials

The income tax disclosure note accompanying the January 31, 2016, financial statements of Walmart is reproduced below:

Note 9. Taxes (in part) Income from Continuing Operations
	Fiscal Year Ended January 31,
($ in millions)	2016	2015	2014
Current:
U.S. federal	$ 5,562	$ 6,165	$ 6,377
U.S. state and local	622	810	719
International	1,400	1,529	1,523
Total current tax provision	7,584	8,504	8,619
Deferred:
U.S. federal	(704)	(387)	(72)
U.S. state and local	(106)	(55)	37
International	(216)	(77)	(479)
Total deferred tax expense (benefit)	(1,026)	(519)	(514)
Total provision for income taxes	$ 6,558	$ 7,985	$ 8,105
Deferred Taxes The significant components of the Companys deferred tax account balances are as follows:
		January 31,
($ in millions)		2016	2015
Deferred tax assets:
Loss and tax credit carryforwards		$ 3,313	$ 3,255
Accrued liabilities		3,763	3,395
Share-based compensation		192	184
Other		1,390	1,119
Total deferred tax assets		8,658	7,953
Valuation allowances		(1,456)	(1,504)
Deferred tax assets, net of valuation allowance		$ 7,202	$ 6,449
Deferred tax liabilities:
Property and equipment		$ 5,813	$ 5,972
Inventories		1,790	1,825
Other		1,452	1,618
Total deferred tax liabilities		9,055	9,415
Net deferred tax liabilities		$ 1,853	$ 2,966

Required:

Focusing on only the first part of Note 9, relating current, deferred, and total provision for income taxes, prepare a summary journal entry that records Walmarts 2016 tax expense associated with income from continuing operations.

Compare the change in deferred taxes you recorded in your summary journal entry to the actual change in Walmarts net deferred tax liability for fiscal 2016. Do they reconcile? What besides continuing operations might affect deferred taxes?