Future Income taxes are caused by which of the following?
A) A company's inability to pay income tax due in a particular tax year.
B) Accounting errors.
C) The fact that the value of one country's currency relative to that of another can change over time.
D) Differences in IFRS and ITA rules pertaining to when revenue and expenses should be recognized.

Question

Quizplus · Accepted Answer

Future income taxes arise due to differences in the timing of when revenue and expenses are recognized for financial reporting purposes (under accounting standards such as IFRS) and for tax purposes (under tax laws such as the Income Tax Act, or ITA). These differences create temporary timing differences that will reverse in future periods, leading to future tax liabilities or assets.

Future Income Taxes Are Caused by Which of the Following