APB #11
Problems with APB #11 in recording deferred taxes:
- Journal entry is not the result of the underlying accounting theory just a simple mechanical process.
- Transactions over time are not treated consistently (tax rates and taxability may change).
- Not adequate to deal with multiple, complex transactions and changes in tax laws.
- Deferred tax credits and debits are not true liabilities and/or assets. They arise only as balancing figures in the journal entry.