The liability method replaces the deferral method. Current and future income taxes are measured using tax rates and laws expected to apply when the liability or asset is settled or realized. Future balances are adjusted for changes in rates and rules enacted at the balance sheet date. US rules only require the use of enacted laws. Discounting of future income taxes is prohibited.
Special rules apply on business combinations.
The material also includes disclosure requirements and addresses intraperiod allocation, refundable taxes, alternative minimum tax, and presentation.