Reading 38: Analysis of Income Taxes - LOS d ～ Q6-8

答案和详解如下：

6.If timing differences that give rise to a deferred tax liability are not expected to reverse then the deferred tax:

A)   should be considered an asset or liability.

B)   should be considered an increase in equity.

C)   must be reduced by a valuation allowance.

D)   should be carried forward to the next period until the reversal takes place.

The correct answer was B)

If deferred tax liabilities are expected to reverse in the future, then they should be classified as liabilities.  If, however, they are not expected to reverse in the future, then they should be classified as equity.

7.When analyzing a company's financial leverage, deferred tax liabilities are best classified as:

A)   a liability.

B)   equity.

C)   a liability or equity, depending on the company's particular situation.

D)   neither as a liability, nor as equity.

The correct answer was C)

Depends on the "performance" of the timing difference.

8.Deferred tax liabilities might be considered neither a liability nor equity, when:

A)   non-reversal is certain.

B)   they are likely to result in cash out flow.

C)   financial statement depreciation is inadequate.

D)   some components are likely to reverse and some components will grow.

The correct answer was C)

In some cases, an analyst will not consider the deferred tax liabilities either liability or equity. This is done if non-reversal is uncertain or when financial statement depreciation is deemed inadequate and, therefore, is difficult to justify increasing stockholder’s equity.