Morin Co Acquired All the Shares of Lightfoot Ltd

Morin Co. acquired all the shares of Lightfoot Ltd. Lightfoot has a number of amortizable capital assets and has properly recorded the related deferred income taxes on its books.
- At the time of acquisition, the fair values of these assets were higher than their carrying values and their tax bases. In Morin's consolidation each year, it must adjust for the deferred taxes that resulted from these temporary differences. Which of the following statements is true?

A) The consolidation adjustment will always result in an increase in the deferred tax liability.
B) The consolidation adjustment will always result in a decrease in the deferred tax liability.
C) The consolidation adjustment can result in either an increase or a decrease in the deferred tax liability.
D) The consolidation adjustment is required only if the tax basis changes.