Compared with the original income tax standards, 18, issued by the Ministry of Finance in February 2006, has undergone major changes in accounting treatment. Firstly, this paper theoretically analyzes and compares the differences between the old and new accounting standards in enterprise income tax calculation, loss treatment and impairment confirmation, and compares and analyzes the differences in income tax calculation methods with examples. Finally, the application significance of the new accounting standards is pointed out.

Keywords accounting standards

income tax

Tax difference

The Accounting Standards for Business EnterprisesNo. 18-Income Tax regulates the accounting treatment of income tax and the disclosure of relevant information. Compared with the old standards, the focus of accounting has changed from the original income statement to the balance sheet, and the accounting treatment of income tax has changed a lot.

I. Major changes in accounting treatment of income tax

In the original standards, there are two accounting methods for income tax: tax payable method and tax impact accounting method (including deferred method and debt method), in which the debt method is the income statement debt method. In the old accounting standards for business enterprises, the difference between accounting and tax law in income, expense recognition and measurement time is called timing difference, while the timing difference is regarded as a permanent difference when the tax payable method is adopted, and the influence of timing difference on the current income tax when the income statement method is adopted is recognized as deferred tax. Deferred tax is the current amount, which does not directly reflect the impact on the future, and does not deal with temporary differences of non-sequential differences. The new standards require enterprises to adopt the balance sheet liability method for temporary differences. On the balance sheet date, the enterprise first calculates the deferred income tax assets (or liabilities) according to the temporary difference between the book value of the assets or liabilities and the tax law basis, and then adjusts the income tax payable calculated according to the tax law to calculate the income tax expenses. The calculation formula is: current income tax expense = current taxable income × tax rate+(deferred income tax liabilities at the end of the period-deferred income tax assets at the beginning). The main differences between the original income statement debt method and the new standard balance sheet debt method are as follows:

(1) Differences in taxes.

The old accounting standards focus on the income statement, and the difference in taxation stems from the inconsistency between accounting standards and tax laws in the recognition and measurement of income and expenses.

The new standard takes the balance sheet as the accounting center, and the tax difference is partly due to the inconsistency between the assets and liabilities confirmed by the accounting standard and the tax law. The new standard introduces the concepts of asset tax basis and liability tax basis, and on this basis, introduces the concept of temporary difference, that is, the difference between the book value of an asset or liability in the balance sheet and its tax basis stipulated in the tax law.

(B) the loss of different treatment

China's current tax law allows enterprises to postpone losses for five years. In the old income tax treatment standards, the deductible losses that can be carried forward to the later period are not recognized in the current period when the losses are made up.

The new standard requires enterprises to recognize deferred income tax assets to the extent that they may obtain future taxable profits to offset the deductible losses that can be carried forward in the later period. Generally known as the current recognition method, the benefits transferred in the future to reduce income tax are recognized in the loss year. Using this method, the enterprise should judge whether the deductible temporary differences within five years can be fully converted into taxable income in the future operating period. If not, the enterprise should not confirm it.

(III) Differences in impairment recognition

There is no impairment provision for deferred debit in the old standards. The new standard stipulates that enterprises should pay the book value of deferred income tax assets on the balance sheet date.

This article comes from: Nobel graduated from paper net ()

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