Deferred Tax Asset and Liability

CFA Level I FRA
#1

Hi fellow-candidates,

I am confused as to why the Deferred Tax Asset is listed under Current Assets (CFA book on FRA page 211), but the Deferred Tax Liabilty is listed under Non-Current Liabilities (page 227). As far as I am thinking, if the asset portion is created with the thought that the deferred tax wil be paid within the next operating cycle, why wouldn’t the liability portion be created with the same assumption?

Thanks!

Tiny Beluga

#2

You will find a more detailed explanation of this in the table on page 477. Please note that the presentation as current is a US GAAP phenomenon. IFRS requires these items to be classified as noncurrent.

take care!

#3

Thank you, Wojtek! I still have a lot to go until I get to page 477, but I will make a note to refer back to my question once I reach it. smiley