Well, we are approaching the end of the second week, and in the final two episodes, I will say a few words about accounting for taxes. Again, like I mentioned before, this discussion by no means pretends to be comprehensive or deep. We are just mentioning some things that sometimes are important to keep in mind. But, like I said, tax accounting is an advanced part, and clearly, those who would like to specialize in that should take some other courses. Now, the question arises, why we talk about that at all? So we talk about tax issues. Now the story here is as follows. That oftentimes in accounting different procedures are allowed for the companies to report for the need to show the income or for tax purposes. Remember that when we talked about inventories, we said that for quite some time people would use LIFO for tax purposes and FIFO for income reporting, killing two birds with one stone. Later it was prohibited to do so, but sometimes it is allowed. And as a result, what happens is that over time there are some differences between taxable income, and therefore, what should be the tax expense derived from that, and what actually people pay. Now, in general, that, like I said, is a very advanced topic. So I will just show why that could happen and what is the consistent approach to that. So we're talking about differences. So the problem is, What should the tax expense be? Now, and like I said, because of these approach to treatment, there may be some differences, In recognition of certain revenues and expenses with respect to taxes, and those may be permanent. The example is, let's say, municipal bond interest, which is by law tax deductible. Or, what is more interesting for us, they may be temporary. And what happens with this temporary, that sometimes we may recognize some revenues or expenses for income reporting purposes in one period, while for tax purposes in the other. And that is the key, the core of the problem, if you will. And in what follows, we will be studying these cases, these small simplistic examples, just to keep this in mind. Because whenever people hear something like deferred taxes, they may be somewhat confused. So this is the main story. So we see that the differences are differences in recognition, Of revenues and expenses for income and for tax purposes. And again, our general principle here is matching. And in what follows, I will show some examples of that. Now let's take an example. An example would go like this, this is a rent payment. Now, the story goes as follows. We have two years, let's say 2014 and then 2015. And then the pretax income is $40,000 here and $60,000 there. So this is pretax income. And let's say that the tax rate is 40%. Now, see what happens. The rent expense, Of $5,000, It is reported for income goals in 2014. But for tax purposes, sort of paid, in, I'll put like paid, in 2015. And that results in a temporary deference. Let's see what we mean here. Let's start with year 2014. So we, first of all, have income tax expense, what is it? So it's 40%. We take 40,000 pretax income, so it's $16,000 here. This is 40% times 40k. Now, we also have income tax payable. Which in this case is higher, why is that? Because this now, because we reported that in the previous year, now it's 45,000, the base. So this is 45,000 times 40%. So income tax payable is $18,000. So we see a mismatch, and the mismatch is called deferred income tax. So you can see that the block number, to be sure of that, ends up ends meet, this is 2,000 here in debit side. So this is what happened at the end of the year 2014. Now, if we go to the next year. So basically, at the end of the year 2014, we have the rent payable, a liability, that does not result in any tax things until the next year. Now, let's see what happens in 2015. Again, we have income tax expense, and here we have income tax payable. But now, see what happens. Well, income tax expense, again, we have $60,000, so we have $24,000 here. But now, here we do not have $60,000, we have $55, because 5 we have already reported. So from 55 we take 40%, and here that becomes $22,000. So you can see that combined that's the same amount, 18 plus 22 clearly is the same as 16 plus 24. So here we, again, have this account deferred income tax, that now has 2,000 on the credit side. And you can see that, I'll put like this, sort of cancels out. So if we had the accounts for two years combined, we would not have had this difference at all, but because we have to report that annually, we do. So that shows to you what we have to do if reporting for income and reporting for taxes occurs at different moments of time. So that is sort of a simple episode. And in the next one, we'll go a little further, and study another case of deferred income taxes.