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Basic Question 8 of 15
When the enacted tax rates change, it is a change in ______.
B. accounting principle that affects the current period's income
C. estimate that affects the current period's income
A. estimate that does not affect the current period's income
B. accounting principle that affects the current period's income
C. estimate that affects the current period's income
User Contributed Comments 4
| User | Comment |
|---|---|
| kalps | When enacted tax rate changes there is a change in the deferred tas asset or liability and so it does affect current yea income |
| teddajr | When enacted tax rate changes, it is a change in estimate and not in accounting principle... Why? |
| thekapila | Well its just a change in estimate becouse the accounting principle is not change. for example u still use same depriciation method or u still use matching principle to match revenue n expense its just the rates r changed so do the calculations. |
| sapu | It should be current year's income or current year's taxable income? |
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Learning Outcome Statements
explain how deferred tax liabilities and assets are created and the factors that determine how a company's deferred tax liabilities and assets should be treated for the purposes of financial analysis
CFA® 2024 Level I Curriculum, Volume 3, Module 9.