The following information was taken from the 2014 annual report of Microsoft Inc.:

A review of the footnotes to Microsoft’s annual report reveals that two major accounting policies affecting its deferred income taxes were (1) the accounting for unearned revenue and (2) the accounting for its portfolio of trading securities. When Microsoft sells a software product, it defers a portion of the revenue received to cover the cost of future technical service and free upgrades that may be provided during the warranty period.
Discuss how Microsoft’s accounting for unearned revenue and its accounting for its portfolio of trading securities could result in the creation of a deferred income tax asset. Discuss the difference between a current deferred income tax asset and a noncurrent deferred income tax asset.

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($ millions) Current assets Deferred income taxes. Long-term liabilities Deferred income taxes 2014 2013 $1,941 $1,632 2,728 1,709