Federal Tax Research 10th Edition by Steven Gill, Gerald Whittenburg, Roby Sawyers, Debra Sanders, William Raabe

Exercise 20

Donovan Corp., a calendar-year-end company, operates a profitable division in Jurisdiction A. In January 2014, Jurisdiction A enacted a tax law that changed the tax rate structure from 30 percent to 35 percent. Donovan wants to know whether it needs to adjust its 12/31/2013 tax provision to reflect the rate change. Also, if not in 2013, when does it need to recognize the effect of that change