- CFA Exams
- CFA Exam: Level I 2021
- Study Session 8. Financial Reporting and Analysis (3)
- Reading 27. Income Taxes
- Subject 2. Deferred Tax Assets and Liabilities
CFA Practice Question
If an asset's tax base is less than its carrying value, a ______ should be created.
B. deferred tax liability
A. deferred tax asset
B. deferred tax liability
Correct Answer: B
User Contributed Comments 2
| User | Comment |
|---|---|
| mrushdi | Tax base less means = More deductins under tax = so less taxable income = so less tax payable recognised upto date = so liability need to be created to account for the same. |
| khalifa92 | tax base < carrying value taxable income < tax expenses = deferred tax liability |