Scan QR code or get instant email to install app
Question:
When an increase in the tax rate is enacted, deferred tax:
A
assets and liabilities both increase in value.
explanation
The liability method (SFAS 109 of U.S. GAAP) takes a balance sheet approach and adjusts deferred tax assets and liabilities to future tax rates. An increase in the tax rate increases the value of both deferred tax assets and deferred tax liabilities.
Take more free practice tests for other PASSEMALL topics with our cfa level 1 exam now!
Related Information
Comments