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Computation of Deferred Tax Liabilities

Summary

This article is one of a series of financial management articles that examines financial statements and financial analysis. Income tax liabilities arise from differences between balance sheet values of certain assets and liabilities, and the tax basis of those same assets and liabilities. Deferred taxes reconcile the tax basis of balance sheet assets and liabilities with the basis currently being used to value assets and liabilities on a balance sheet, which is usually market value.