Write-downs of inventories under lower of cost and net realizable value rules will trigger a DTL.

Name: Write-downs of inventories under lower of cost and net realizable value rules will trigger a DTL.
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Question

Quizplus · Accepted Answer

Write-downs of inventories under lower of cost and net realizable value (LCNRV) rules typically result in an immediate expense recognition in the income statement, reducing taxable income and thus leading to a deferred tax asset (DTA), not a deferred tax liability (DTL).

Write-Downs of Inventories Under Lower of Cost and Net Realizable