Income taxes payable or receivable is the current balance-sheet amount after current tax, payments, refunds, settlements, and other supported changes. It is not the same as current tax expense and does not include deferred tax balances. Use a rollforward rather than a plug to cash.
Reconcile the current balance
ASC 740-10-10-1 identifies recognition of current-year taxes payable or refundable as a primary income-tax accounting objective.
Suppose opening tax payable is $30,000, return current tax is $170,000, and cash taxes paid are $160,000. With no other supplied current-balance changes, ending payable is $40,000. A $31,400 deferred tax expense changes total tax expense but does not enter this current rollforward. Match each payment and refund to its period and jurisdiction, and keep uncertain-benefit presentation separate. The calculation cannot resolve an unexplained return-to-ledger difference or decide legal offset rights.
A final aging control identifies which tax years and jurisdictions make up the closing current balance.
Put the concept to work
Apply this concept
- Build a current-tax payable or receivable rollforward that distinguishes expense, estimated payments, refunds, settlements, and reclassifications.
Learning resources
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