The 2016 Form 10-K of Dow Chemical disclosed the following: Deferred tax assets increased by $939 million and deferred tax liabilities increased by $336 million.
How do these balance-sheet changes affect tax expense on the income statement for the year?

Question

Quizplus · Accepted Answer

An increase in deferred tax assets decreases tax expense, while an increase in deferred tax liabilities increases tax expense. The net effect is a decrease in tax expense by $603 million ($939 million - $336 million).

The 2016 Form 10-K of Dow Chemical Disclosed the Following