- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 9. Analysis of Income Taxes
- Subject 2. Deferred Tax Assets and Liabilities
CFA Practice Question
Pine Grove Co. reported both deferred tax assets and deferred tax liabilities for the years 2015 and 2016. Pine Grove should report deferred income tax expense (benefit) equal to ______ at the end of 2016.
B. sum of the net changes in deferred tax assets and liabilities
C. increase in the deferred tax liabilities
D. decrease in the deferred tax assets
A. amount of the current tax liability plus the sum of the net changes in deferred tax assets and liabilities
B. sum of the net changes in deferred tax assets and liabilities
C. increase in the deferred tax liabilities
D. decrease in the deferred tax assets
Correct Answer: B
Per SFAS No. 109, under the asset and liability approach method, deferred income tax expense (benefit) is equal to the sum of net changes in deferred tax assets and deferred tax liabilities on the balance sheet.
User Contributed Comments 3
| User | Comment |
|---|---|
| kalps | Deferred income tax expense = sum of teh net changes in deferred tax assets and liabilities |
| farhan92 | how i saw this was: If you owe bob 100 and bob owes you 10. you would report the difference. |
| Freddie33 | Bob ain't getting sh** from me |