Table:
|  | 2019 | 2018 |
| --- | --- | --- |
| Deferred Tax Assets: |  |  |
| Net operating loss carry forwards | $20,772,428 | $20,342,559 |
| Intangibles | 207,618 | 318,178 |
| Credits | 28,022 | 112,086 |
| Other | 506,349 | 613,202 |
| Total deferred tax assets | 21,514,417 | 21,386,025 |
| Deferred Tax Liabilities: |  |  |
| Intangibles | – | – |
| Total deferred tax liabilities | – | – |
| Valuation allowance | (21,486,396) | (21,386,025) |
| Net deferred tax asset | $28,021 | $– |
Paragraphs:
NOTE L – INCOME TAXES
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, the following that impact the Company: (1) reducing the U.S. federal corporate income tax rate from 35 percent to 21 percent; (2) eliminating the corporate alternative minimum tax; (3) creating a new limitation on deductible interest expense; (4) limiting the deductibility of certain executive compensation; and (5) limiting certain other deductions.
The Company follows ASC 740-10 “Income Taxes” which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Deferred income taxes include the net tax effects of net operating loss (NOL) carry forwards and the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets are as follows:
Question:
How are deferred tax liabilities and assets determined under ASC 740-10?
Answer: determined based on the difference between financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse