When tax rates are changed subsequent to the creation of a deferred tax asset or liability, the FASB requires that:

Question

Quizplus · Accepted Answer

When tax rates are changed subsequent to the creation of a deferred tax asset or liability, the FASB requires all deferred tax accounts to be adjusted to reflect the new tax rates. This adjustment is made through income tax expense in the period in which the tax rate change is enacted.

When Tax Rates Are Changed Subsequent to the Creation of a Deferred