Tax Deferral question from mock accounting, carrying, previous, question, liability

simeezee

One of the CFA mocks has a question about the tax deferred liability at the end of 2010…
…..for accounting purposes, the carrying values are 2010: 1800, 2009: 1900.
for tax purposes, the bases are: 2010: 1280, 2009: 1600.
The tax rate droppped to 25%. My understanding is that the DTL would be (19001600)*.25+ (18001280)*.25 = 205. However, the answer is just (18001280)*.25 = 130. Why does the CFA no account for the change in the previous year’s DTL?

sabina

I believe its because the 2010 values already contain the 2009 values, because its cumulative….. but I may be wrong…..

jawz

All it matters on a balance sheet is the current DTL which is the cumulative effect of the previous years.
So its (18001280)*.25