Financial statement disclosure of the components of income tax expense:

Question

Quizplus · Accepted Answer

Disclosure of the components of income tax expense is typically included in the footnotes to the financial statements, rather than directly on the face of the income statement. This disclosure would include information on current and deferred tax expense, as well as any related tax credits, and would also provide an explanation of any unusual or non-recurring tax items. While disclosure of the cash paid for taxes is relevant and important for the statement of cash flows, it is not a component of income tax expense as reported on the income statement. The presence or absence of permanent differences would not affect the necessity or location of disclosure for income tax expense components.

Financial Statement Disclosure of the Components of Income Tax Expense