assume that Revenue items in Deferred tax assets in Amazons footnotes ($23 million in 2010) all are the result of unearned revenue from the cash sales of Amazon Prime.

for tax purposes, Amazon recognizes revenue on the cash sale of Amazon Prime. At the end of the fiscal year, Amazon recognizes a deferred tax asset under Revenue items.

i) Explain how the deferred tax asset arises.

ii) Can companies have deferred tax liabilities arising from unearned revenue? Explain.