The carrying amount of deferred tax assets and deferred tax liabilities can change:

Question

Quizplus · Accepted Answer

The carrying amount of deferred tax assets and deferred tax liabilities can change both with a change in the amount of the related temporary differences and even if there is no change in the amount of the related temporary differences. This is because changes in tax rates or changes in the expected timing of reversal of temporary differences can also affect the carrying amount of deferred tax assets and liabilities. A re-assessment of recoverability of deferred tax liabilities is only one factor that may contribute to a change in carrying amounts. Therefore, option E is incorrect as it implies that all answers are correct.

The Carrying Amount of Deferred Tax Assets and Deferred Tax