Where is the loss due to reduction in deferred tax asset as a result of change in tax rate recorded…is it “infrequent and usual item”? under US GAAP
It’s in long term Asset part because such loss carried forward which can be used as tax deductible in further period is the benefit for the company or the acquirer of such company. It’s essential in recognizing such kind of asset the relevance of its future economic benefits, what means that the tax authority can not deny tax deduction on that basis. Also, when it is certain that such assets will not be longer utilized, for any reason, it must immediately be derecognized.
Thanks for the reply. Quick follow up question : How is the income statement impacted?