What is meant by "tax allocation within a period"? What is the justification for such practice?
Tax allocation within a period is the practice of allocating the income tax for a period to such items as income from continuing operations, discontinued items, and prior period adjustments.
The justification for tax allocation within a period is to produce financial statements which disclose an appropriate relationship, for example, between income tax expense and (a) income before from continuing operations, (b) discontinued operations, and (c) prior period adjustments (or of the opening balance of retained earnings).
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