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8. Financial statement presentation
8. Financial statement presentation
8.1. Balance sheet classification
8.1. Balance sheet classification
All deferred tax liabilities, deferred tax assets, and any valuation allowance against deferred tax assets are classified as noncurrent in the balance sheet. If these deferred tax accounts relate to the same tax-paying component of the company and the same tax jurisdiction, they are netted against each other and shown as a single net number in the balance sheet.
Sometimes components of a single company are viewed as different companies for tax purposes, or pay tax in different jurisdictions.
If deferred tax liabilities and assets relate to components of a company that are separate for tax purposes, or relate to different tax jurisdictions, they should not be offset.
8.2. Disclosure notes: Income tax expense
8.2. Disclosure notes: Income tax expense
Disclosure notes should indicate the following:
Current portion of the tax expense (or tax benefit)
Deferred portion of the tax expense (or tax benefit), with separate disclosure of amounts attributable to:
Portions that do not include the effect of separately disclosed amounts
Operating loss carryforwards
Adjustments due to changes in tax laws or rates
Adjustments to the beginning-of-the-year valuation allowance due to revised estimates
Tax credits
8.3. Disclosure notes: Deferred tax assets and deferred tax liabilities
8.3. Disclosure notes: Deferred tax assets and deferred tax liabilities
Companies must disclose the following:
Total of all deferred tax liabilities
Total of all deferred tax assets
Total valuation allowance recognized for deferred tax assets
Net change in the valuation allowance
Approximate tax effect of each type of temporary difference (and carryforward)
8.4. Disclosure notes: Net operating loss carryforwards
8.4. Disclosure notes: Net operating loss carryforwards
Companies must disclose the following concerning Net Operating Loss (NOL) Carryforwards
The amounts of any NOL carryforwards and
Any applicable expiration dates
As indicated previously, NOLs arising in tax years beginning after December 31, 2017, can be carried forward indefinitely for federal taxes, but sometimes there are expiration dates that apply to older NOLs, to other unusual circumstances, or with respect to state or local taxes.
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