Under the Balance Sheet approach,the differences between the carrying values of assets or liabilities and their tax bases are treated as:

Question

Quizplus · Accepted Answer

The Balance Sheet approach recognizes temporary differences between the carrying values of assets or liabilities and their respective tax bases. These temporary differences may result in future tax liabilities or tax assets, which may offset future tax liabilities. Therefore, the Balance Sheet approach treats temporary differences as the primary source of deferred tax assets and liabilities.

Under the Balance Sheet Approach,the Differences Between the Carrying Values