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Can a company prepare financial statements according to GAAP and not include Future Income Taxes?



538 day(s) ago

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mike11 		It can, for example in a simple small company, if its accounting depreciation and tax depreciation are the same, and therefore, there is no need to account for the timing difference in the deferred tax liability. Disclosure in the financial statement to account for income taxes is important.

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noamnoam 		Yes they can, but there are several conditions. You have to apply the Differential Reporting section of the CICA handbook which allows you to forego Future income taxes.

Their are several conditions, the main ones being that it only applies to "non-publicly accountable enterprises" and you need signed approval from all owners of the company in order to apply this section.

And of course their are several disclosures that need to be made in order to satisfy Canadian GAAP.

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Question Title Can a company prepare financial statements according to GAAP and not include Future Income Taxes?
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