contestada

Because Gene Co. uses different methods to depreciate buildings for financial statement and income tax purposes, Gene has temporary differences that will reverse during the next year and reduce taxable income. Deferred income taxes that are based on these temporary differences should be classified in Gene’s balance sheet as a:
(a)-Noncurrent liability.
(b)-Current liability.
(c)-Noncurrent asset.
(d)-Current asset.

Respuesta :

Answer:

(c) Non-current asset.

Explanation:

As for the information provided,

Since there are temporary differences, due to which the tax liability will be reduced, that means it is an asset, though it will occur in next year itself, it should be current in nature.

But as it relates to difference in taxation due to buildings which is non current in nature, the deferred tax asset will also be termed as non current asset.

Thus, correct option is:

(c) Non-current asset.

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