Sorry I possibly misunderstood then. My brain is obviously fried from FAR and the terminology might be fading. I was thinking when the question said basis that it meant (cost – accumulated depreciation). Maybe someone else can clarify.
Semantics aside, you have to know that realistically that it would be very odd to depreciate an asset on the books faster than for tax purposes. Depreciation is the typical example that will be used on questions of an expense that is accelerated for tax purposes that will result in a deferred tax liability.
Whenever I faced a DTA/DTL question I wrote this down on my scrap paper (save the examples) and it never failed me:
Deferrred tax asset = books expense first (ex/ bad debt expense) or tax income first (ex/ prepaid rent)
Deferred tax liability = tax expense first (ex/ depreciation) or books income first (ex/unrealized gain on securities)
I hope someone can clarify the issue from you question and good luck!
FAR - 7/1/13 - 98
AUD - 8/31/13 - 94
BEC - 11/23/13 - 89
REG - 1/13/14 - 86
Study Materials:
Becker - Online Course and Flash Cards
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