Which of the following statements is true as to GAAP regarding accounting for income taxes, and its use of the asset and liability approach?

Question

Quizplus · Accepted Answer

The asset and liability approach to accounting for income taxes, which is consistent with the balance sheet emphasis of both U.S. GAAP and IFRS, focuses on the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the financial statements or tax returns. This approach does not consider the time value of money, does not allow considerable flexibility in the balance sheet classification of deferred tax amounts, and is not consistent with cash basis accounting.

Which of the Following Statements Is True as to GAAP