1. The tax payable method is a method of accounting for income tax, as opposed to the tax impact method.

The tax payable method means that the amount of tax due to the difference between the current period’s pre-tax accounting profit and taxable income is directly included in the current period’s profit and loss without being deferred to subsequent periods. Accounting treatment methods. Under the tax payable method, there is no need to recognize the amount of tax that is affected by the difference between pre-tax accounting profit and taxable income. Therefore, the income tax expense included in profit and loss for the current period is equal to the income tax payable calculated based on taxable income for the current period. .

Under this method, the income tax expense for the current period is equal to the amount of income tax payable. Since the income tax expense for temporary differences is equal to the amount of income tax payable, since the income tax impact of temporary differences is not allocated across periods, it is not Reflected in the "deferred tax" account and described only in the notes to the statements.

2. Tax Impact Accounting Method

The tax impact accounting method is to defer the amount of tax that is affected by the timing difference between the current period’s pre-tax accounting profits and tax income. And allocate it to subsequent periods, that is, the impact of timing differences in the current period on income tax will be allocated across periods.

Article 12 of "Accounting Standards for Business Enterprises No. 38 - First Implementation of Accounting Standards for Business Enterprises" stipulates that on the first implementation date, enterprises should stop using the tax payable method or the original tax impact accounting method and change to the tax impact accounting method. The balance sheet debt method stipulated in "Accounting Standards for Business Enterprises No. 18 - Income Tax" handles income tax.

If the tax impact accounting method was originally used to calculate income tax expenses, the amount of deferred income tax liabilities and deferred income tax assets should be calculated and offset at the same time in accordance with the relevant provisions of "Accounting Standards for Business Enterprises No. 18 - Income Tax" The deferred tax balance is adjusted to opening retained earnings based on the difference between the two amounts.