If the enacted tax rate is changed for the current and future years, the earnings effect of the change in the beginning balances of the deferred tax assets is recognized in the current year.

Question

Quizplus · Accepted Answer

The earnings effect of a change in tax rates on the beginning balances of deferred tax assets and liabilities is recognized in the period in which the tax rate change is enacted, but it affects the income tax expense in the financial statements of the current period, not by adjusting beginning balances of deferred tax assets or liabilities.

If the Enacted Tax Rate Is Changed for the Current