I feel like i am not catching anything while i am reading the chapter. This is the hardest chapter i have encounter so far.
I agree. I felt the same way. I think book doesn’t do a good job of explaining these concepts to new comers. Refer some other source, I studied from videos and then i went to do the book reading again, only then it made sense. Still not comfortable though.
Stalla has a good tax section.
the only way to go thro this chapter, monstrous as it is, is to take a few examples and walk thro’ them thoroughly. Yes, it is tough, but not unsurmountable
Just remember Temporary/Versus Permanent difference which can be created using different accounting method. Example: Accelerated vc Straight line depreciation methods: - Accelerated methods are typicallyused for tax purposes. The SL is normally used for financial reporting. - In the early years of the asset’s life, because depreciation under accelerated method is higher than the one under SL method, THERE IS A TEMPORARY DIFFERENCE, and hence it adds to DTL. Because IT IS A TEMPORARY DIFFERENCE, in the later year this difference will reverse (due to the used of the depreciation method…go to have a look at the long lived assets section). In this case, the Taxman would like to have the money ASAP, but because this is a temporary difference which will reverse in the future, you will register a DTL (and not pay now).
i may read schweser notes instead, CFAI did a terrible job of explaining the concept. One surprising thing is that i do not see a lot questions about taxes in this forum, why is that?
ssdnola Wrote: ------------------------------------------------------- > i may read schweser notes instead, CFAI did a > terrible job of explaining the concept. One > surprising thing is that i do not see a lot > questions about taxes in this forum, why is that? No one like it!
Part of the FSA book uses chapters written by Fried, Sondhi, and White. These authors write some of the driest material you will lay your hands on. I have an old edition of their Financial Statement Analysis textbook printed in 1997. The book is so heavy that I used to hate wearing it in my backpack back when I was in college.
Reading 38 is without a doubt one of the most boring things I have ever read in my life. Now whenever I meet a tax accountant or attorney its hard to keep the pity out of my voice!!