Question

Curry Co. has several deferred tax balances on their balance sheet; $100,000 deferred asset retaled to bad expense; $600,000 deferred tax liability related to depreciation; $200,000 deferred tax asset related to a new operating loss, which is expected to reverse in the next 12 months. What categories of deferred tax assets/liabilites will the Company have on its balance sheet?

?A. Current deferred tax assets
?B. Non Current deferred tax assets
?C. Current deferred ta assets and non current deferred tax liability
?D. Non current deferred tax liability
?E. None onf the above
?
?Please help me. Thank you!

Answer 1

Answer : D: non current deferred tax liability

Explanation:

Ordinarily an asset / liability would be classified in accordance with the definition of a current asset / liability in AASB 101 Presentation of Financial Statements.

In the case of deferred tax assets / liabilities. Paragraph 56 of AASB 101 states:

‘When an entity presents current and non-current assets and current and non-current liabilities as separate classifications in its statement of financial position, it shall no tclassify deferred tax assets (liabilities) as current assets (liabilities)’.

Regardless of when a deferred tax balance is expected to be settled / extinguished all deferred tax assets and liabilities are shown as non-current.