- 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
An analyst should classify a deferred tax liability as ______ if the liability is expected to reverse with subsequent tax payment.
A. an asset
B. a liability
C. equity
Correct Answer: B
If the liability is not expected to reverse, there is no expectation of a cash outflow and the liability should be treated as equity.
User Contributed Comments 3
| User | Comment |
|---|---|
| Shaan23 | Thank god. Worst section I've had soo far. |
| farhan92 | got to love how the last questions are always easy..kinda makes you think you've mastered the section! |
| kingirm | To classify a liability as a liability ... haha))) |