1. How are deferred tax assets and deferred tax liabilities derived? How do they relate to the difference between tax expense and taxes payable? How could an organization have a tax receivable? Why is the tax expense reported on the income statement comprised of current and deferred tax?

2. How are the tax benefits of net operating losses (NOL) disclosed on financial statements? Which is more beneficial to an organization, an NOL carryforward or an NOL carryback? Explain why. When would a company decide to forego a carryback?

3. What types of businesses might benefit more from an NOL carryforward vs. an NOL carry back?

4. Why are there differences between taxable and financial income? What are some examples of permanent and temporary differences? Why do these differences exist? How do they affect the financial statements?

5. So given the many differences in taxable vs. financial income, can anyone in our class comment on the common practice by corporations of keeping two sets of books, one for taxable income and one for financial income?