Suppose that on December 22, 2019 Congress increased the corporate tax rate from 21 percent to 25 percent effective in 2020. The tax rate change will affect only deferred tax assets and liabilities that arise in 2020 and thereafter.

Question

Quizplus · Accepted Answer

The change in the corporate tax rate affects both existing deferred tax assets and liabilities and those that arise in 2020 and thereafter, because deferred taxes are measured using the enacted tax rates expected to apply when the temporary differences are settled or realized.

Suppose That on December 22, 2019 Congress Increased the Corporate