Table of Contents

Deferred Tax Assets…………………………………………………….Page 3
Temporary Differences and Income Tax Provision……………………. Page 4
Defined Benefit Plan and Defined Contribution Plan………………….. Page 5
Share Based Compensation and Direct/Indirect Method………………. Page 6
Investing and Financing Activities and Noncash Transactions……....... Page 7
References……………………………………………………………… Page 8

Deferred tax assets are created when there are taxes paid or carried forward but are not yet recognized on the income statement. The amount of the deferred tax assets are calculated by taking into account the financial reporting standards for book income and the jurisdiction’s tax rules for taxable income. A deferred tax asset will only be recognized when the difference between the loss-value or depreciation of the asset is expected to offset future profit. A deferred tax liability is created as a result of temporary differences between the company’s accounting and tax carrying values, the anticipated and enacted income tax rate, and the estimated taxes payable for the current year. The liability may or may not be realized during any given year which is what makes it a deferred tax liability.
Amazon is a huge company with many different parts to their balance sheet. It can be easily notices that Amazon does well at showing each item and including footnotes to fully explain their position for each item. Upon reviewing Amazon’s balance sheet there is an amount of deferred tax assets and liabilities that total 316 million in 2014 and 156 million in 2013. These deferred balances are due to the effects of temporary differences between the carrying amounts of assets, liabilities, the tax bases and are stated at the enacted tax rates which are expected to be in effect when the taxes are actually paid or recovered. These deferred tax assets and liabilities are due to