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Basic Question 1 of 20

Bay Tree Golf Corp. recorded a deferred income tax liability in 2015. The amount resulted from Bay Tree's book income exceeding its taxable income. The liability is expected to reverse in 2020, when taxes will become currently payable. At the end of 2015, which one of the following describes the valuation of deferred income taxes payable?

A. Historic cost
B. Amortized cost
C. Current market value

User Contributed Comments 1

User Comment
achu Historic cost is essentially nominal (undiscounted) cost
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I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach

Andrea Schildbach

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® 2025 Level I Curriculum, Volume 3, Module 9.