题目是不是没说清楚under IFRS还是US GAAP

问题如下：

Question A deferred tax asset has been previously recognized. At the current balance sheet date, the criteria for economic benefits are not met but the tax differences are still expected to be temporary. As a result:

选项：

A.the existing deferred tax asset should be reversed. B.a valuation allowance account should be established. C.the existing deferred tax asset should be reclassified as equity.

解释：

Solution

1. Correct because if a deferred tax asset or liability resulted in the past, but the criteria of economic benefits is not met on the current balance sheet date, then, under IFRS, an existing deferred tax asset or liability related to the item will be reversed.

2. Incorrect because if a deferred tax asset or liability resulted in the past, but the criteria of economic benefits is not met on the current balance sheet date, then, under IFRS, an existing deferred tax asset or liability related to the item will be reversed. Under US GAAP, a valuation allowance is established.

3. Incorrect because it answers for a deferred tax liability (reported under US GAAP) that is not expected to reverse. The analyst should classify the deferred tax liability as debt if the liability is expected to reverse with subsequent tax payment. If the liability is not expected to reverse, there is no expectation of a cash outflow and the liability should be treated as equity.

Analysis of Income Taxes

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