Which of the following statements is true?

Question

Quizplus · Accepted Answer

A change in capitalized inventory costs under §263A can result in either an increase or a decrease in a deferred tax asset depending on the direction of the change. For example, if the change results in higher capitalized costs, it could lead to a larger deferred tax asset as the company will be able to deduct more costs in the future. Conversely, if the change results in lower capitalized costs, it could lead to a smaller deferred tax asset. Therefore, statement B, C, and D are incorrect.

Which of the Following Statements Is True