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Basic Question 13 of 20
When analyzing the effects of deferred tax liabilities, which of the following factors would make the user not treat the deferred taxes as liabilities?
B. Future tax rates have stayed stable.
C. The general price level has remained stable.
A. There are changes in the specific price levels of assets.
B. Future tax rates have stayed stable.
C. The general price level has remained stable.
User Contributed Comments 1
| User | Comment |
|---|---|
| kalps | 1. Changes in General price levels 2. Changes in specific prices levels of assets Deferred tax liability does not represent a true liability - it will never reverse out as long as prices continue to rise and the firm continues to replace its assets. |
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Learning Outcome Statements
explain how deferred tax liabilities and assets are created and the factors that determine how a company's deferred tax liabilities and assets should be treated for the purposes of financial analysis
CFA® 2024 Level I Curriculum, Volume 3, Module 9.