According to Evans' Accounting Theory: Contemporary Accounting Issues, accountants have developed two alternative approaches to income tax accounting, which are the cash method and the allocation method. The cash method is described as a simple and straightforward approach. The amount of income taxes actually paid during the year is reported in the Income Statement. The amount comes from the company's tax return and eligibility is not changed in any way. Therefore, the company's actual transaction to record its income tax liability forms the basis for the amount of income tax expenses reported in the income statement. The allocation method is slightly different. The actual amount of tax paid during the year is ignored when it comes to reporting income taxes on the income statement. The amount of income taxes reported in the income statement is based on the income tax rate paid by the business, which is applied to the amount of pre-tax income. This makes the Income Statement perfectly consistent with profit before taxes. Using the allocation method makes it appear that all income statement items are based on the same method. The development of accounting pronouncements on tax matters reveals the difficulty that regulators have had with this topic. Below are summaries of key statements related to income tax accounting. APB OPINION n. 11 This filing required the deferral method of income tax accounting. When the net accounting income exceeds the net taxable income, a break-even credit must be recognized, when the net taxable income exceeds the net accounting income, a break-even debit must be recognized. This was considered a deferred credit and a deferred debit. Deferred expenses and credits were a default classification and were placed on the balance sheet in what was called "no man's land," or in some undefined region, between liabilities and equity for deferred credits and between assets and liabilities for deferred expenses. According to opinion no. 11 of the APB it was believed that the balancing credits and debits would eventually reverse and cancel and therefore it was to be treated as a temporary measure. From 1967 to 1980, companies followed global tax allocation procedures under Opinion No. 11 of the APB and reported deferred charges and credits. However, some problems arose from this. Due to changes in tax rates and the nature of the firm's investments, the balance of deferred tax credits on the firm's balance sheet began to grow rather than reverse and disappear..