| Posted: 21 Nov 2009 at 13:07 | IP Logged
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MARBNYC wrote:
Here's the problem;
Cahn Co. applies straight-line amortization to its organization costs for income tax purposes, but expenses all costs as incurred for financial statement reporting. For tax purposes a 15-year period is used. Cahn has no other temporary differences, has an operating cycle of less than 1 year, and has taxable income in all years. Cahn should report both current and noncurrent deferred income tax assets at the end of:
Answer:
YR1.................YR2
YES................NO
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Did you post this incorrectly, or am I not getting this...
I would think that in "YR2" there would be a current portion of the DTA and a non current portion of the DTA.
Every year there is going to be an expense on the tax form and not one in the financial stmt b/c we already unloaded the entire expense there. So each year one fifteenth of that organizational cost will get reversed, hence I see this as the current DTA and the remainder is non current. Am I lost?
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Topic: Tax Exp Current & Non-current (reversal)
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