ASC

ASC 740-924

Entertainment—Casinos

740 Income Taxes

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In brief

IntermediateIncome taxesIndustry-specificRecognition

This Subtopic applies Topic 740's deferred tax model to casino entities, identifying the common situations where casino book accounting diverges from income tax reporting. Under 740-924-25-1, deferred income taxes arise from three recurring casino differences: casino receivables recognized for books but taxed when collected, costs deferred for books but expensed for tax, and progressive slot jackpots accrued from meter readings for books but deducted for tax when paid. It provides no separate scope, following the scope of Subtopic 924-10 (740-924-15-1).

Key points (5)
  • The Subtopic addresses accounting and reporting of deferred income taxes for casinos where book financial reporting differs from income tax reporting (740-924-05-1).
  • Its scope is the same as the Entertainment—Casinos Overall Subtopic, Section 924-10-15 (740-924-15-1).
  • Deferred income taxes result when casino receivables are recognized for financial statements but the when-collected method is used for tax (740-924-25-1(a)).
  • Deferred income taxes result when costs are deferred for financial statement purposes but charged to expense for income tax reporting (740-924-25-1(b)).
  • Deferred income taxes result when progressive slot jackpots are accrued based on meter readings for books but charged against revenue only when paid for tax (740-924-25-1(c)).

For students. This is a short industry overlay: it does not create a special measurement method, it just flags three casino-specific temporary differences that feed the ordinary Topic 740 deferred tax computation. A common misunderstanding is treating these items as permanent differences—they are timing (temporary) differences that reverse when the receivable is collected, the cost is amortized, or the jackpot is paid.

deferred income taxestemporary differencescasino receivableswhen-collected methoddeferred costsprogressive slot jackpotsmeter readingsbook-tax differences

Machine-generated study aid for ASC 740-924. Check the source paragraphs below.

740-924-00Status

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740-924-00-1
No updates have been made to this subtopic.

740-924-05Overview and Background

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740-924-05-1
This Subtopic provides guidance to entities operating as casinos on the accounting and reporting of deferred income taxes when book financial reporting differs from income tax reporting.

740-924-15Scope and Scope Exceptions

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Overall Guidance

740-924-15-1
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 924-10-15.

740-924-25Recognition

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Deferred Income Taxes

740-924-25-1
Financial statement reporting for casinos differs from income tax reporting, resulting in deferred income taxes when any of the following conditions are met:
  1. a
    Recognition of casino receivables is used for financial statements and the when-collected method is used for income tax reporting.
  2. b
    Costs are deferred for financial statements and are charged to expense for income tax reporting.
  3. c
    Progressive slot jackpots are accrued based on meter readings for financial statements and are charged against revenue when paid for income tax reporting.

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