Beatnik

I have a question related to tax implication: I recall reading that if the company is growing and expanding, it's very likely that the difference is not going to reverse and DTL can be treated as equity for analysis purpose.

So why the heck in mock exam , the answer for this question does not follow the above logic. Do I miss something?


A company which prepares its financial statements in accordance with IFRS incurred and
capitalized €2 million of development costs during the year. These costs were fully deductible
immediately for tax purposes, but the company is depreciating them over two years for financial
reporting purposes. The company has a long history of profitability which is expected to
continue. Which is the most appropriate way for an analyst to incorporate the differential tax
treatment in his analysis? He should include it in:
A. liabilities when calculating the company’s current ratio.
B. equity when calculating the company’s return on equity ratio.
C. liabilities when calculating the company’s debt-to-equity ratio.