A net operating loss (NOL) carryforward creates a deferred tax liability that should be classified as current to the extent that the NOL will be recovered in the following year.

Question

Quizplus · Accepted Answer

A net operating loss (NOL) carryforward creates a deferred tax asset, not a deferred tax liability. Additionally, the deferred tax asset should be classified as current or noncurrent depending on the expected timing of its realization, not based solely on the following year.

A Net Operating Loss (NOL) Carryforward Creates a Deferred Tax