- The taxes on IS are book taxes
- This is not exactly what the company pays to the Gov
- The taxes the company actually pays to Gov are cash taxes
- One-time events are not cash-tax deductible. This means with the following items, you don’t get an immediate taxable benefit:
- SBC
- Goodwill impairment
- Loss on sale of assets
- PP&E write-down
- This will create a DTA
In summary:
- Write-ups create a DTL. Other positive one-time events create a DTL also.
- Write-downs create a DTA. Other negative one-time events create a DTA also.