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I am very confused about the whole "Provision (Benefit) for income taxes" and interplay with NOLs and deferred tax attributes in general.
For starters, if a corporation has negative pre-tax income, do they automatically get a benefit (i.e. negative) income tax which is essentially an addback to the negative pre-tax income making actual net income better or is the "benefit" only come into play when the company has an NOL they can use?
Then how do NOLs get shown on the financial statements? If the Company has a loss in a year, presumably they pay zero cash income taxes. On the asset side of the balance sheet I assume the company would add the NOL as a deferred tax asset. What happens to the cash flow statement?
Any assistance would be hugely appreciated!
For starters, if a corporation has negative pre-tax income, do they automatically get a benefit (i.e. negative) income tax which is essentially an addback to the negative pre-tax income making actual net income better or is the "benefit" only come into play when the company has an NOL they can use?
Then how do NOLs get shown on the financial statements? If the Company has a loss in a year, presumably they pay zero cash income taxes. On the asset side of the balance sheet I assume the company would add the NOL as a deferred tax asset. What happens to the cash flow statement?
Any assistance would be hugely appreciated!
