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Basic Question 4 of 8
Which of the following statement concerning deferred tax assets is false?
B. Deferred tax assets will always be realized to generate future positive cash flow.
C. The reversal of a deferred tax asset valuation allowance generates additional current period income.
D. Taxable losses can be carried back to offset prior years' taxable income and realize a tax refund, and can be carried forward to offset future years' taxable income and reduce tax liability.
A. Deferred tax assets relate to future tax deductions.
B. Deferred tax assets will always be realized to generate future positive cash flow.
C. The reversal of a deferred tax asset valuation allowance generates additional current period income.
D. Taxable losses can be carried back to offset prior years' taxable income and realize a tax refund, and can be carried forward to offset future years' taxable income and reduce tax liability.
User Contributed Comments 2
| User | Comment |
|---|---|
| NIKKIZ | Taxable losses can be carried back to offset prior years' taxable income and realize a tax refund...? |
| ashish100 | yes |
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Martin Rockenfeldt
Learning Outcome Statements
identify financial reporting choices and biases that affect the quality and comparability of companies' financial statements and explain how such biases may affect financial decisions;
evaluate the quality of a company's financial data and recommend appropriate adjustments to improve quality and comparability with similar companies, including adjustments for differences in accounting standards, methods, and assumptions;
evaluate how a given change in accounting standards, methods, or assumptions affects financial statements and ratios;
analyze and interpret how balance sheet modifications, earnings normalization, and cash flow statement related modifications affect a company's financial statements, financial ratios, and overall financial condition.
CFA® 2025 Level II Curriculum, Volume 2, Module 15.