[agripper]

Where is the $8000?

At December 31, 20X1, Bren Co. had the following deferred income tax items:

A deferred income tax liability of $15,000 related to a noncurrent asset
A deferred income tax asset of $3,000 related to a noncurrent liability
A deferred income tax asset of $8,000 related to a current liability

Which of the following should Bren report in the noncurrent section of its December 31, 20X1, balance sheet?
A.

A noncurrent asset of $3,000 and a noncurrent liability of $15,000
Correct B.

A noncurrent liability of $12,000
C.

A noncurrent asset of $11,000 and a noncurrent liability of $15,000
D.

A noncurrent liability of $4,000
You are correct, the answer is B.

FASB ASC 740-10-45-4 provides that “an enterprise shall separate deferred tax liabilities and assets into a current amount and a noncurrent amount.”

Note that “amount” is singular, indicating that separate asset and liability amounts should be “netted,” leaving a single amount.

Amount to be reported in Bren's noncurrent section of balance sheet at December 31, 20X1:

Deferred tax liability $15,000
Less deferred tax asset (3,000)

---

Net noncurrent liability to
be reported on balance sheet $12,000
========

 

 

[Anonymous]

😖

[smurf]

Not sure were you got that answer but its (now) wrong. Now the correct answer should be A non-current liability of $4,000. Under GAAP, deferred tax liabilities and assets should be recorded as a noncurrent number on the b/s. all deferred tax liabilites and assets must be netted and shown as a signle amount. 15-3-8=4 noncurrent liab.

[Lidis]

Hello Agripper
You can not mix current with noncurrent. You can offset noncurrent deferred assets with noncurrent deferred tax liability.
But current with noncurrent is not allowed.
Lidis

[Tncincy]

2015 question?

It begins with a 75
Been here too long as a cheerleader.....time to pass

[Author]

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