- 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
The income tax paid in excess is recognized as ______.
B. an asset but not a deferred tax asset
C. a deferred tax asset
A. a tax liability
B. an asset but not a deferred tax asset
C. a deferred tax asset
Correct Answer: B
It should be separate from deferred taxes on a company's balance sheet.
User Contributed Comments 19
| User | Comment |
|---|---|
| zeiad | WHY NOT A DEFERRED TAX ASSET ? |
| olagbami | because the question didn't say in excess of income tax expense |
| czar | OMG! this topic drives me nuts! :) |
| cfaajay | It will be treated as advance tax. Remember deferred will come into because of matching principle of accounting whereas advance tax is not based on gap between accnting and tax deptt. |
| viruss | I will soon start to become violent with my computer with this topic ... DTL & DTA make me want to drop this stuff lol |
| Kobe8kenji | viruss, u really make my day lol |
| moneyguy | ...so the extra-payment of taxes creates a prepaid tax account on the asset side of the Balance Sheet? |
| johntan1979 | :( I almost vomited blood... :( |
| emy1 | just when i think i have this topic mastered...fml:-( |
| jonan203 | jeez, taxes is like splitting split ends... |
| gill15 | THats actually pretty crazy. If this question shows up on the exam..I'll be soo happy... Tick...These are the ones you remember.. |
| ldfrench | Does anyone have a 6 foot long piece of rope? Asking for a friend... |
| praj24 | Can't stand this topic....arrrrgggghhhhhhh |
| Inaganti6 | IN EXCESS OF WHAT ? There's no specificity . I really really really believe they do their darnest to make sure you DON'T PASS. |
| cfastudypl | at least it is not the real exam yet, so you have time to make all the corrections and adjustments. Thanks to AN! |
| ashish100 | Olagbami made it so simple. Everyone chill!! WEGONNAMAKEIT! or whatever that guy's username was |
| maryprz14 | Oh GOD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! can a question be any trickier? !!!!! |
| khalifa92 | deferred tax assets reverse systematically like in depreciation but tax assets are a bit different |
| Freddie33 | I love CFA ♥ |