Income Taxes And Pensionssouthern New Hampshire University A

Income Taxes and PensionsSouthern New Hampshire University ACC-610: Financial Reporting II 01:40:01 GMT -05:00Income Taxes and PensionsIf Congress were to vote to remove corporate taxes, Amazon's financial statements would be greatly affected. ASC 740-10 provides guidance for companies on how to report income tax effects on their financial statements when new tax laws are passed by Congress or existing tax rates are altered. It states, “When deferred tax accounts are adjusted as required by paragraph 740-10-35-4 for the effect of a change in tax laws or rates, the effect shall be included in income from continuing operations for the period that includes the enactment date.” (FASB, ASC 740-10-45). Once Amazon recognizes the potential impact on their financial statements, they will not only see the benefits of the new tax law reflected in their financial statements but also ensure compliance with the new legislation.This decision by Congress would cause Amazon's net profit to rise even more on its income statement because Amazon won't have to pay taxes on its profits, leading to lower expenses and higher income on the company's financial statement. There will also be a significant growth in retained earnings and a few asset