Assume Congress reduces the corporate tax rate from 35 percent to 25 percent effective in 2016. The tax rate change will affect only deferred tax assets and liabilities that arise in 2016 and thereafter.

Question

Quizplus · Accepted Answer

The tax rate change will affect all deferred tax assets and liabilities, including those existing before 2016, as they need to be remeasured using the new tax rate.

Assume Congress Reduces the Corporate Tax Rate from 35 Percent