Comparative Research On The Income Tax Accounting Under The Balance Sheet Liability Method

With the development of economic globalization, integration, internationalconvergence of accounting standards become an inevitable choice of the nationaleconomic development and adaptation of economic globalization.In2006,ChinaAccounting Standards(CAS) has achieved convergence with International AccountingStandards(IAS),and＂China Accounting Standards No.18-Income Tax＂(CAS18) isfirst enacted in China’s official income tax accounting standards, it adopts the balancesheet liability method,clears and unifies the accounting for income tax for the first time.This is consistent with international practice of the development of income taxaccounting, in line with trends in the internationalization of accounting. In2007, the＂People’s Republic of China Law on enterprise income tax＂has been published,itrequires that the new enterprise income tax law are alll applied domestic-investedenterprises and foreign-funded enterprises, the implementation of enterprise income taxrate is25%, pre-tax deduction measures and standards are unified, tax preferentialpolicies are also unified. The implementation of new accounting standards and newenterprise income tax law, promot the development of income tax accounting,however,China’s income tax accounting develops lately, there are still some problems in theoryand application,the professional judgment of accountants on the recognition andimpairment of judgment of deferred tax assets are higher, Ministry of Finance has tookthe recognition and measurement of deferred tax assets as one of the significantaccounting policy questions to research thoroughly and solve next step. So theimprovement and effective implementation of income tax accounting standards becomemore important.This paper has carried on the theory inquisition,inluding the relevant theory ofincome tax accounting-production、 definition、 development、 accounting object、accounting process; it compares CAS18and"the United States’ Financial AccountingStandards No.109-Income Tax Accounting＂(FAS l09),＂International AccountingStandards No.12-Income Tax＂(IAS l2), CAS18need to be perfect in the recognitionand measurement of deferred tax assets, category presentation of deferred tax anddisclosure of income tax expense;It provides basis for improving the disclosure requirements in CAS18by comparing the implementation between CAS18and IAS l2by Yanzhou Coal.Under the implementation of the new accounting standards and the new enterpriseincome tax law, listed companies are in strict accordance with the CAS18during2007to2010: recognition of deferred tax assets and deferred tax liabilities are carefully,disclosure and presentation of income tax expense are perfectly, company’s income taxnegative and actual income tax rate become lower, the performance has improved.Analysing annual report of listed companies in Henan Province provids basis forstuding specific implementation of CAS18, the disclosure of the amount and basis ofrecognization of deferred tax assets and deferred tax liabilities, and the disclosure ofincome tax information provide incremental value.According to the problems inapplication of CAS18, and in order to improve CAS18and strengthen enforcement ofCAS18,it makes suggestions and measures to promote the development of income taxaccounting.