CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

If an asset's tax base is less than its carrying value, a ______ should be created.

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
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