B Co Reported a Deferred Tax Liability of $24 Million for for the Year

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The Answer is A deferred tax liability is established using the currently enacted tax rate for the year(s) a temporary difference is expected to reverse. In this case that rate was 40%. The change in the tax law in 2014 constitutes a change in estimate. The deferred tax liability is simply revised to reflect the new rate. <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB2441/11eaa317_3c56_acdb_9fad_43db58f4a566_TB2441_00.jpg" alt="A deferred tax liability is established using the currently enacted tax rate for the year(s) a temporary difference is expected to reverse. In this case that rate was 40%. The change in the tax law in 2014 constitutes a change in estimate. The deferred tax liability is simply revised to reflect the new rate.   When a company revises a previous estimate, prior financial statements are not revised. No adjustment is made to existing accounts. A disclosure note should describe the effect of a change in estimate on income before extraordinary items, net income, and related per-share amounts for the current period." class="answers-bank-image d-block" rel="preload" > When a company revises a previous estimate, prior financial statements are not revised. No adjustment is made to existing accounts. A disclosure note should describe the effect of a change in estimate on income before extraordinary items, net income, and related per-share amounts for the current period.

B Co Reported a Deferred Tax Liability of $24 Million for for the Year

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B Co Reported a Deferred Tax Liability of $24 Million for for the Year

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