If revenue is recognized for financial reporting purposes but deferred for tax purposes this results in a deferred tax liability.

Name: If revenue is recognized for financial reporting purposes but deferred for tax purposes this results in a deferred tax liability.
Brand: Quizplus
Rating: 5.0 (30 reviews)

Question

Quizplus · Accepted Answer

This is because the company has already recognized the revenue for financial reporting purposes which means that they will eventually have to pay taxes on that income in the future, resulting in a deferred tax liability.

If Revenue Is Recognized for Financial Reporting Purposes but Deferred