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Financial Terms | |
Deferred Income Tax Expense |
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Definition of Deferred Income Tax ExpenseDeferred Income Tax ExpenseThat portion of the total income tax provision that is the result
Related Terms:Accrued expenses payableexpenses that have to be recorded in order for the financial statements to be accurate. Accrued expenses usually do not involve the receipt of an invoice from the company providing the goods or services. accrued expenses payableThe account that records the short-term, noninterest- Accrued Incomeincome that has been earned but not yet received. For instance, if you have a non-registered Guaranteed Investment Certificate (GIC), Mutual Fund or Segregated Equity Fund, growth accrues annually or semi-annually and is taxable annually even though the gain is only paid at maturity of your investment. Accumulated Other Comprehensive IncomeCumulative gains or losses reported in shareholders' Adjusted Income from ContinuingOperations Reported income from continuing operations After-tax profit marginThe ratio of net income to net sales. After-tax real rate of returnMoney after-tax rate of return minus the inflation rate. ![]() Annual fund operating expensesFor investment companies, the management fee and "other expenses," Asymmetric taxesA situation wherein participants in a transaction have different net tax rates. Average tax ratetaxes as a fraction of income; total taxes divided by total taxable income. average tax rateTotal taxes owed divided by total income. Before-tax profit marginThe ratio of net income before taxes to net sales. Book IncomePretax income reported on the income statement. Break-even tax rateThe tax rate at which a party to a prospective transaction is indifferent between entering Cash flow after interest and taxesNet income plus depreciation. Cash Flow–to–Income Ratio (CFI)Adjusted cash flow provided by continuing operations ![]() common-size income statementincome statement that presents items as a percentage of revenues. Contingent deferred sales charge (CDSC)The formal name for the load of a back-end load fund. Corporate tax viewThe argument that double (corporate and individual) taxation of equity returns makes Corporate taxable equivalentRate of return required on a par bond to produce the same after-tax yield to Current Income Tax ExpenseThat portion of the total income tax provision that is based on Current Tax Payment Act of 1943A federal Act requiring employers to withhold income taxes from employee pay. Deferred-annuitiestax-advantaged life insurance product. deferred annuities offer deferral of taxes with the Deferred AnnuityAn annuity providing for income payments to commence at a specified future time. Deferred callA provision that prohibits the company from calling the bond before a certain date. During this deferred compensationpay related to current performance Deferred equityA common term for convertible bonds because of their equity component and the ![]() Deferred futuresThe most distant months of a futures contract. A bond that sells at a discount and does not Deferred nominal life annuityA monthly fixed-dollar payment beginning at retirement age. It is nominal Deferred Tax AssetFuture tax benefit that results from (1) the origination of a temporary difference Deferred Tax LiabilityFuture tax obligation that results from the origination of a temporary Deferred taxesA non-cash expense that provides a source of free cash flow. Amount allocated during the Depreciation expenseAn expense account that represents the portion of the cost of an asset that is being charged to expense during the current period. Depreciation tax shieldThe value of the tax write-off on depreciation of plant and equipment. depreciation tax shieldReduction in taxes attributable to the depreciation allowance. Disposable Incomeincome less income tax. Dividend incomeincome that a company receives in the form of dividends on stock in other companies that it holds. Double-tax agreementAgreement between two countries that taxes paid abroad can be offset against earned incomeEarned income is generally an individual's salary or wages from employment. It also includes some taxable benefits. Earned income also includes business income if the individual is self-employed. Earned income is used as the basis for calculating RRSP maximum contribution limits. earnings before interest and income tax (EBIT)A measure of profit that Earnings before interest and taxes (EBIT)A financial measure defined as revenues less cost of goods sold Earnings before interest and taxes (EBIT)The operating profit before deducting interest and tax. Earnings before interest, taxes, depreciation and amortization (EBITDA)The operating profit before deducting interest, tax, depreciation and amortization. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working EBDDT - Earnings before depreciation and deferred taxesThis measure is used principally by Economic incomeCash flow plus change in present value. Effective Tax RateThe total tax provision divided by pretax book income from continuing Electronic Federal Tax Payment Systems (EFTPS)An electronic funds transfer system used by businesses to remit taxes to the government. Employee Retirement Income Security Act of 1974 (ERISA)A federal Act that sets minimum operational and funding standards for employee benefit Equivalent taxable yieldThe yield that must be offered on a taxable bond issue to give the same after-tax ExpenseThe reduction in value of an asset as it is used for current company operations. Expense ratioThe percentage of the assets that were spent to run a mutual fund (as of the last annual ExpensedCharged to an expense account, fully reducing reported profit of that year, as is appropriate for ExpensesThe costs incurred in buying, making or producing goods and services. ExpensesCosts involved in running the company. Federal Unemployment Tax Act (FUTA)A federal Act requiring employers to pay a tax on the wages paid to their employees, which is then used to create a Fixed ExpensesCost of doing business which does not change with the volume of business. Examples might be rent for business premises, insurance payments, heat and light. fixed expenses (costs)expenses or costs that remain the same in amount, Fixed-income equivalentAlso called a busted convertible, a convertible security that is trading like a straight Fixed-income instrumentsAssets that pay a fixed-dollar amount, such as bonds and preferred stock. Fixed-income marketThe market for trading bonds and preferred stock. Fixed-income securityA security that pays a specified cash flow over a Foreign tax creditHome country credit against domestic income tax for foreign taxes paid on foreign GENERAL-AND-ADMINISTRATIVE EXPENSESWhat was spent to run the non-sales and non-manufacturing part of a company, such as office salaries and interest paid on loans. Imputation tax systemArrangement by which investors who receive a dividend also receive a tax credit for IncomeNet earnings after all expenses for an accounting period are subtracted from all Income beneficiaryOne who receives income from a trust. Income bondA bond on which the payment of interest is contingent on sufficient earnings. These bonds are Income from Continuing OperationsAfter-tax net income before discontinued operations, Income fundA mutual fund providing for liberal current income from investments. income fundsMutual funds that seek regular income. This type of fund invests primarily in government, corporate and other types of bonds, debt securities, and other income producing securities and in certain circumstances can also hold common and preferred shares. Income SmoothingA form of earnings management designed to remove peaks and valleys Income SplittingThis is a tax planning strategy of arranging for income to be transferred to family members who are in lower tax brackets than the one earning the income, thus reducing taxes. Even though attribution rules limit income splitting, there are still a number of legitimate ways to do so, such as through the use of spousal RRSPs. INCOME STATEMENTAn accounting statement that summarizes information about a company in the following format: Income StatementOne of the basic financial statements; it lists the revenue and expense accounts of the company. income statementFinancial statement that summarizes sales revenue Income statementA financial report that summarizes a company’s revenue, cost of income statementFinancial statement that shows the revenues, expenses, and net income of a firm over a period of time. Income statement (statement of operations)A statement showing the revenues, expenses, and income (the Income StatementsA financial statement that displays a breakdown of total sales and total expenses. Income stockCommon stock with a high dividend yield and few profitable investment opportunities. INCOME TAXWhat the business paid to the IRS. Income taxA government tax on the income earned by an individual or corporation. Income Tax ExpenseSee income tax provision. Income Tax ProvisionThe expense deduction from pretax book income reported on the Incomes PolicyA policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example. Indirect Taxestaxes paid by consumers when they buy goods and services. A sales tax is an example. Inflation TaxThe loss in purchasing power due to inflation eroding the real value of financial assets such as cash. Interest equalization taxtax on foreign investment by residents of the U.S. which was abolished in 1974. Interest incomeincome that a company receives in the form of interest, usually as the result of keeping money in interest-bearing accounts at financial institutions and the lending of money to other companies. Interest tax shieldThe reduction in income taxes that results from the tax-deductibility of interest payments. interest tax shieldtax savings resulting from deductibility of interest payments. Investment incomeThe revenue from a portfolio of invested assets. Investment tax creditProportion of new capital investment that can be used to reduce a company's tax bill Investment Tax CreditA reduction in taxes offered to firms to induce them to increase investment spending. Life Income FundCommonly known as a LIF, this is one of the options available to locked in Registered Pension Plan (RPP) holders for income payout as opposed to Registered Retirement Savings Plan (RRSP) holders choice of payout through Registered Retirement income Funds (RRIF). A LIF must be converted to a unisex annuity by the time the holder reaches age 80. Limited-tax general obligation bondA general obligation bond that is limited as to revenue sources. management expense ratio (MER)The total expenses expressed as an annualized percentage of daily average net assets. MER does not include brokerage fees and commissions, which are also payable by the Fund. Margin Tax RateThe tax rate applicable to the last unit of income. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |