quick question, if the tax rate changes for the year 2010 from 35% to 25% it is going to have an effect on the DTL and DTA of that year, but is it going to also have an effect in DTLs and DTAs of past years????作者: ishfaque 时间: 2011-7-11 19:48
yes.
But DTL & DTA recorded on the balance sheet is cumulative. So its a onetime calculation on the latest balance sheet with the new tax rate.
DTL(new tax rate) = DTL (old tax rate) +(-) change in DTL due to new rates作者: JoeyDVivre 时间: 2011-7-11 19:48
Yes. On the balance sheet the liabilities/assets increase/decrease depending on the direction of tax rate change. On the income statement side- Income tax expense , net income , retained earnings and equity are affected depending on whether the company has a net DTL or net DTA.
