​If you receive cash, but recognize the unearned revenue in the following year, with a value of 10. And you have tax depreciation that is 20 more than the financial reporting depreciation. And accounting income is 100, with a tax rate of 25%, then you will account:

By having to Cr. 22.5 for tax payable ([100 + 10 – 20] * .25), Cr. 5 for deferred tax liability (25% of the 20), and Dr. 2.5 DTA (25% of the 10). 

The following are the combination for what constitutes or helps determine income tax expense:
​
(1)  Changes in DTAs and DTLs,
(2) Changes in Valuation Allowances for DTA,
(3) Changes in uncertain tax positions, and
​(4) Income Tax Payable. 

Assuming a 40% tax rate, if you have depreciation expense for accounting purposes of 20K and tax purposes of 30K, and of that, accounting income is 100K and taxable income is 90K,  you will then need to realize:

​A Dr. of tax expense of 40 (40% of 100) a DTL Cr. of 4 (40% of 10 in depreciation), and Cr. 36 for tax payables (40% of 90K). 

If you receive cash advances of 100 currently taxed at 40%, and you defer 50 of the year 2xx+1  at 40%, and then sweeping tax laws expect to make tax rates go to 20% in the year 2xx+2 of the other deferred 50, you will have a DTA of $30 (40% of 50 and 20% of 50).

Let us assume you have accounting income of 100. And your depreciation in taxes is in excess or above that of accounting by 20. And you have other bad debt for accounting purposes that is in excess or above the ones in taxes by 4. And the rate is 50%.

​So, what you will need to do is Dr. DTA because of bad debt by 2 (50% of 4), Dr. 50 of income tax expense (50% of 100), and then you will Cr. your DTL because of depreciation by 10 (50% of the 20), Cr. tax payable by 42 (100-20+4). 

Steps for determining tax expenses are:
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(1) Calculating the income tax that is currently payable;
(2) Calculating the ending balance in the DTL or DTA should be; and then
​(3) Calculating the delta in DTA and DTL that is required.

Assume you have 100 in income statement revenue, but you have 160 in taxes. And income in the income statement is 25 and the tax statement is 40, all with a tax rate of 50%, you will then need to: ​Dr. a DTA of 7.5 (50% of the difference in income), you will have a tax expense of 12.5.

​Carryforwards creates a deferred tax asset.

If you collect rent, and it is recorded as deferred revenue, and you recognize income in the period the property is occupied, you may have a DTA.

You will debit your income expense, you will debit the DTA of the deferred piece, and you will then credit income tax payable.

​So, if you have tax income of 100, deferred of 50, at a rate of 20%, you will then Dr. 20 income tax expense, Dr. 10 deferred tax asset, and then Cr. 30 for income.

​Future Taxable Amount results in a DTL, where Future Deductible Amounts results in a DTA. 

Steps to apply when a tax rate change is scheduled to occur, and there are a series of temporary differences are:
​
(1) Determine the total of future taxable amounts and future deductible amounts;
(2) Apply the specific tax rate of each of the future years; and
(3) Sum the tax effects to find the balances for the DTL and DTA. 

​When there is not sufficient taxable income to help offset the future deductible amounts, then effectively a Valuation Allowance or a “VA” may be deemed necessary.

Deferred Tax Asset can occur when there is a future deductible amount.

​Future tax rate * the total of all future taxable amounts is applied to determine the appropriate balance for the deferred tax liability account. 

​The combo of changes in the deferred tax assets and liabilities results in the income tax expense.

​Inter-period tax allocation is allocating the income taxes between two or more periods.

​Enacted tax rate is the tax rate used to measure the deferred tax asset and liability in the years temporary differences are set to reverse. 

Permanent differences in financial accounting income and taxable income never reverse.