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Technology Stocks : Extreme Networks, Inc. (EXTR)
EXTR 17.65-0.9%Nov 5 3:59 PM EST
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To: Dave who wrote (612)7/20/2001 9:02:30 AM
From: A.L. Reagan  Read Replies (1) of 770
 
No, if taxable income in a year exceeds book income on account of timing differences that reverse in the future then you have a deferred tax asset - because you are paying more actual taxes currently than is calculated on a GAAP basis.

Likewise, if you dodge taxes currently on account of timing differences between GAAP and tax that will generate taxable, but not GAAP, income in the future, then you have a deferred tax liability to reflect those taxes to be paid in the future.

Just to clarify, we are talking non-current assets and liabilities here, not current in a classified balance sheet.
The current liability "income taxes payable" generally reflects just the actual tax payments expected to be made in the next 12 months on account of taxable P&L through the balance sheet date.

This may seem counter-intuitive, but any good intermediate accounting textbook could get you through it.
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