CFA Practice Question

There are 520 practice questions for this study session.

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.

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
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