- CFA Exams
- CFA Level I Exam
- Topic 3. Financial Statement Analysis
- Learning Module 24. Income Taxes
- Subject 2. Deferred Tax Assets and Liabilities
CFA Practice Question
Which of the following events or transactions would require the recognition of deferred income tax consequences?
A. Life insurance proceeds received by a company as beneficiary of a policy on an officer
B. Warranty expense accrued for financial accounting purposes but deducted as paid for tax purposes
C. Fines paid by a company as a result of law violations
Explanation: The difference caused by the differences in recognition of warranty expense is the only item that is a timing difference. The others are all permanent differences.
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