Income tax expense net, increase, reported, because

wildrose

Hi, everybody.
This quiz is from CFA curriculum (book 3 - page 418 -3).

"Income tax expense reported on a company's income statement equals taxes payable, plus the net increase in

A. deferred tax assets and deferred tax liabilities.
B. deferred tax assets, less the net increase in deferred tax liabilities.
C. deferred tax liabilities, less the net increase in deferred tax assets."

Their answer is B.
However, I thought the correct one is C, because

Income tax expense = taxes payable + change in DTL - change in DTA.

Could someone explain this to me?

kasinkei

TungTran, looks C to me as well.

Errata?

Lets wait for views from others.

shootingstar

errata on cfai website

In solution 3 (p. A-18), C is correct. Change asset to liability (2nd line) and liability to
asset (3rd line).

CP

kmf229

Right on folks.

C is correct. It says so in the errata as well

manasib

On page 385 CFAI SS9, It says:

A company's income tax expense or tax benefit in case of a recovery appears on its income statement and is an

aggregate of its income tax payable (or recoverable in case of a tax benefit)
+ any changes in deffered tax assets and liabilities.

With regards to this even B makes sense to me. However this can potentially be wrong as in Errate website said (In solution 3 (p. A-18), C is correct. Change asset to liability (2nd line) and liability to
asset (3rd line))

Problem is how to tacke this type of question in exams

sgupta0827

So it is print-error in CFA Curriculum, right?

eagles_dare13

Apparently yes

rkapoor

Thank you all for your helps.