An Analytical Basis for the Treatment of Corporate Income Tax.

Abstract This article discusses the analytical framework for the treatment of corporate income tax within the accrual basis of accounting in the U.S. The deferred tax represents a liability of the corporation. An estimate of the future income tax payable arising from current activities is appropriate. The estimation of future tax payments within accrual accounting requires the use of a partial allocation method. Payment of income tax provides the benefit of allowing the firm to continue its revenue-generating function.