US GAAP ― deferred tax

Produced by Tolley in association with

Corporation Tax

Guidance

This guidance note relates to the aspects of ASC 740 which were previously known as FAS 109.

The concepts underlying ASC 740 are similar to those under IFRS and therefore this note gives an overview of the main differences between the two standards along with practical examples. The differences discussed below are based on those identified jointly by the IASB and FASB as being the most significant when the two boards were considering converging the accounting for income taxes under IFRS and US GAAP.

There are some specific accounting rules in ASC 740 which apply to specific types of US companies such as Steamship Enterprises. These are outside the scope of this note as they are unlikely to be of application to UK readers.

In respect of accounting for uncertain tax positions and tax exposures, please see the US GAAP ― uncertain tax positions guidance note.

Terminology differences

It is worth noting that certain phrases under US GAAP have a different meaning to those under IFRS. These include:

US GAAP terminology

How these would

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Malcolm Greenbaum

Director and Principal Trainer at Greenbaum Training and Consultancy Limited

Malcolm is a UK Chartered Accountant and Chartered Tax Advisor winning the John Wood Medal in the November 1995 CIOT sitting for the best paper on business taxation. He was previously Director of Finance and Taxation Programmes at BPP Professional Education and has delivered IFRS, US GAAP, UK Tax and VAT training (at all levels from an introduction to the complexities of IAS 39) to a multitude of organisations world-wide since 1992. Malcolm has particular experience in delivering bespoke training programmes to multi-nationals in the financial services, transport and energy sectors as well as delivering UK tax and VAT update programmes to accounting and law firms. He is passionate about training and his enthusiasm ensures that the participants enjoy the learning experience whilst gaining knowledge through their engagement in the sessions and through encouraging them to ask questions and discuss practical issues they may have. Malcolm also provides consultancy services to companies and accounting firms, including provision of VAT advice, reviewing accounting policy manuals and advising on accounting treatments of various transactions. In his spare time, Malcolm enjoys flying having gained a Private Pilot's Licence in 2014.

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