CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

When enacted tax rates change, ______
A. an adjustment is made using estimated rates applied to the current deferred tax asset or liability balance.
B. an adjustment is made using the new rates applied to the income tax expense and taxes payable.
C. an adjustment is made to bring the deferred tax liability or asset to an amount based on the new rates.
Explanation: This adjustment is made in such a way that the deferred tax asset or liability will be the expected amount to reverse, based on the new rates.

User Contributed Comments 2

User Comment
kalps Enacted tax rates change: Adjusment required to bring the deferred tax liabilty or asset to be the expected amount to be reversed based on the new tax rates
jpducros kalps, you must be working in a Consolidation department ! ;-)
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