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Are there any accountants / finance experts? I have a couple…

Hi are there any accountants...
Hi are there any accountants / finance experts? I have a couple questions re: DTA and DTL accouting and double entries
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Answered in 25 minutes by:
3/10/2018
Carter McBride
Carter McBride, Financial Advisor
Category: Finance
Satisfied Customers: 1,058
Experience: Adjunct Professor
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Hey! I'm Carter, I'm a CPA and can help you with this. What's going on.

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Customer reply replied 1 month ago
Thanks for responding Carter. Currently building a financial model here. The company is using 20 years straightline for its books and 10 yr straightline for taxes. So lets say for the particular assetBook Depreciation: 100
Tax Dep: 50
Tax Rate: 30%
DTL: 50 * 30% = 15 correct?Except, I hav taxable losses as well. So while on my accounting books i show 5 in taxes expense, because my additional tax depreciation gives me a tax loss, i pay 0 in taxes.So 15 DTL increases my Lia
5 Tax Expense reduces my Earnings
What is my balancing 10 come from? A 10 DTA?

The calculation of the DTL is correct.

So your entries would be to:

DTL - 15

Federal Taxes -15

That would get your balance on Federal Taxes to be -$10., which would be your NOL that you could carryover to next year.or back.

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Customer reply replied 1 month ago
But if the tax expense on my books is only 5, how do i account for the delta between my DTL of 15 and my Tax Expense of 5?
Customer reply replied 1 month ago
Does that NOL basically create a 10 DTA?

Sorry, its not an NOL. If you owed $5 in tax, the adjusting entry would put it to -$10, which is the refund you would be due from carrying the NOL back to a previous year.

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You can put the delta in an account like income tax expense - deferred.

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Customer reply replied 1 month ago
Going to use the "Call Me" option in a bit to give you a call if thats ok?

Sure!

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Customer reply replied 1 month ago
In about 20 mins. Thanks.

Hey! Just wanted to follow up to see if you needed anything else. If not, please leave a rating so I can get credit for helping you out. Thanks!

Carter McBride
Carter McBride, Financial Advisor
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