Assume Congress reduces the corporate tax rate from 35 percent to 25 percent effective in 2017.The tax rate change will affect only deferred tax assets and liabilities that arise in 2017 and thereafter.

Question

Quizplus · Accepted Answer

The tax rate change will affect all deferred tax assets and liabilities, including those that arose before 2017, because deferred tax items are remeasured using the enacted tax rate expected to apply when the related temporary differences reverse.

Assume Congress Reduces the Corporate Tax Rate from 35 Percent