Cougar, Inc

Cougar, Inc., an IFRS reporter, estimates a deferred tax asset of $80,000 due to a book-tax difference in warranty liabilities. Management has assessed that it is probable that the firm will not realize 20% of the deferred tax asset. After recording the net deferred tax asset, Cougar's net income will ________ and assets will ________.

A) increase by $16,000; increase by $16,000
B) decrease by $16,000; decrease by $16,000
C) increase by $80,000; decrease by $80,000
D) decrease by $80,000; increase by $80,000