Income Tax Accounting Standards

The research on income tax accounting has always been one of the hot topics to the academics. On february 15,2006, the Ministry of Finance issued the "China Accounting Standards-Basic Standards" and 38 specific standards. Based on the balance sheet debt method, the income tax accounting aroused people's more attention. From"Deal with the tax law" to "balance sheet debt method" is a skip-type transformation, which means that we need to do further research on the income tax accounting standards to to strengthen the guidance of practice. Meanwhile, the implementation of the "Enterprise Income Tax Law of People's Republic of China" on January 1,2008 also provides a good opportunity for research of the balance sheet debt method. Based on the normative analysis and the lots of achievements in 2007 and 2008, this article appeared in the process of implementing the income tax accounting and analyzes the problems deeply, and then puts forward some relevant policy suggestions.The main line of this paper is the development of the accounting for income taxes, based on which formed the following questions:First, why tax payable method was replaced by tax effect accounting method? Second, among three accounting methods (deferral method, liability method and net value method), which is the best choice to improve the quality of financial reporting? Why liability method instead of deferral method in the development of accounting standards? Third, what is the balance sheet liability method, and why CAS 18 adopt balance sheet liability method rather than income statement liability method? Fourth, whether the quality of financial reporting have been improved under the balance sheet liability method? What is the key point and the difficulty of the balance sheet liability method? Fifth, whether there are issues in CAS 18, and how to make further amendments? Sixth, how is the current implementation of CAS 18 in China? And what problems arised, what action have been adopted by users and others interrelations?The analysis is that balance sheet liability method is the best choice in accounting for income tax, for it is greatly curb the profit manipulation, and improve the quality of financial reporting. However, many problems still exist in reality, so that the implementation of balance sheet liability method will face more challenges. The contributions of this paper are mainly concerned in two aspects:one is modify the concepts of tax base of liability and temporary difference; the other one is the implementation to enterprise after CAS 18 and make a thorough analysis and some suggestions.The limitations of this paper are also showed in two aspects:one is lack of analysis based on recognition, measurement and disclosure of specific business or industry, another is several cases of enterprises do not meet the statistical sampling principles, may not reflect the whole level in China.