American Accounting Association 2006 Midwest Region Meeting March 30 – April 1 Chicago, Illinois

Saturday, April 1, 11:00 a.m. to 12:50 p.m.
Concurrent session 6C - Classroom Exercises (Teaching and Curriculum)

Title: Using a Worksheet Approach to Deferred Tax Calculations to Assist Student Learning in Intermediate Accounting

Wendy A. Duffy, Ph. D., CPA Illinois State University

ABSTRACT: This paper describes and illustrates the use of a worksheet to organize the calculations needed to prepare the journal entry for deferred income taxes and to determine the appropriate presentation of deferred tax amounts in the balance sheet. A series of examples illustrates the basic format of the worksheet and the use of the worksheet to solve increasingly more complex deferred tax problems. The paper also illustrates how the worksheet can be modified and/or expanded to allow for changes in tax rates, multiple future tax rates, and operating loss carryforwards. Income tax accounting is one of the more difficult topics in Intermediate Accounting; instructors may find this worksheet approach to be a useful tool that will assist their students in learning the basics of this topic and that will allow them to illustrate or assign more complex problem situations in the area of income tax accounting.

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