A deferred tax asset is the expected future tax benefit (savings) associated with income reported in the current-year
GAAP financial statements.

Question

Quizplus · Accepted Answer

A deferred tax asset arises when there are temporary differences between the tax base of an asset or liability and its carrying amount in the financial statements, leading to the recognition of taxable amounts in future periods when the asset is realized or the liability is settled. This results in a future tax benefit, as the company anticipates paying less tax in the future due to these differences.

A Deferred Tax Asset Is the Expected Future Tax Benefit