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As a result of differences between depreciation for financial-reporting purposes and tax purposes, the financial-reporting basis of Noor Co.'s sole depreciable asset, acquired in 2017,
As a result of differences between depreciation for financial-reporting purposes and tax purposes, the financial-reporting basis of Noor Co.'s sole depreciable asset, acquired in 2017, exceeded its tax basis by $250,000 at December 31,2017. This difference will reverse in future years. The enacted tax rate is 30% for 2017, and 40% for future years. Noor has no other temporary differences. In its December 31,2017 balance sheet, how should Noor report the deferred tax effect of this difference?
As a liability of $100,000. |
As a liability of $75,000. |
As an asset of $100,000. |
As an asset of $75,000. |
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