- CFA Exams
- CFA Level I Exam
- Study Session 8. Financial Reporting and Analysis (3)
- Reading 27. Income Taxes
- Subject 4. Temporary versus Permanent Differences
CFA Practice Question
Deductible temporary differences result in a deferred tax ______ when the carrying amount of a liability is ______ than its tax base.
B. asset; less
C. liability; more
A. asset; more
B. asset; less
C. liability; more
Correct Answer: A
Deductible temporary differences result in a deferred tax asset when the tax base of an asset exceeds its carrying amount and, in the case of a liability, when the carrying amount of the liability exceeds its tax base.
User Contributed Comments 4
User | Comment |
---|---|
boddunah | liability is key word. |
cleopatraliao | should be B, shouldnt it?? |
cleopatraliao | sorry my bad its the carrying amt of a liability not asset!;P |
farhan92 | liability shoots the sheriff and becomes an asset |