eXACTLY!

I havethe same problem.Installment sale is recognized when cash is received...and in tax return we do the same so technically there should not be any temporary difference?

i am still a little confused with accounting for installment sales.

got a response from becker.... on the deferred taxes hope this helps people!

Actually, based on the facts here, it is not a deferred tax asset, but it reduces the deferred tax liability. We indicate that the temporary difference is an asset so that it ultimately reduces the deferred tax liability.

Here is the theory. When an installment sale is created, it results in a deferred tax liability. This is part of box 1 on page F6-37. Why? Because this installment sale is fully taxed now for GAAP and will be taxed later for tax purposes. When we collect in future years, it reverses the deferred tax liability.

So in essence, you are correct. I think it is just our explanation in the asset column that confused you. But there is no actual deferred tax asset here.

[QUOTE=AFrieds]has anyone else using becker had an issue when working the deferred tax simulation? I really do not understand how a decrease in the installment receiveable for the year decreases the deferred tax liability? Th

Installment sales are a future taxable amount.  If you reduce it, you reduce the future taxable amount.  Once you get to recognize FTA, FDA and permanent differences, you will get really good at this.