The correct method for calculating the amount of a deferred tax liability or asset may be expressed as a formula as follows:

Question

Quizplus · Accepted Answer

The correct formula for calculating the amount of a deferred tax liability or asset is to subtract the tax bases of assets or liabilities from their carrying amounts, and then multiply the result by the tax rate. This can be expressed as (Carrying amount of assets or liabilities - tax bases of assets or liabilities) × tax rate, which is option A.

The Correct Method for Calculating the Amount of a Deferred