You are an auditor of Grove, an accounting firm in San Antonio, Texas. As an auditor, you have been assigned to the engagement of Darden Manufacturing. Recently, Darden has gone through a change in personnel and a new accounting director, Bridget, has been hired to oversee the company's accounting and financial reporting.

During the audit, you and your team work out of Darden's headquarters in a room provided by the client. Since Bridget is new to the organization, she has learned a lot about Grove and the entire auditing process. On one particular day, Bridget stopped by your office because of a question your audit team has regarding the company's income tax expense.

Darden has a depreciation difference between book-to-tax of $28 Million. This $28 Million represents accelerated depreciation expense Darden was able to claim on their current and prior tax returns in advance of recognizing the expense on their financial statements in which they will do over the useful life of the asset.

In their preliminary financial statements, Bridget calculated the related Deferred Tax Liability as follows:

$28 Million x .30 = $8.4 MM. Her journal entry into the financial statements was:

Dr. Income Tax Expense 8,400,000

Cr. Deferred Tax Liability 8,400,000

In working with your tax team at Grove, Pamela, a 3rd-year Tax Associate, mentioned that the enacted tax rate for the current year and the years that follow is 24%. Your audit staff believes the journal entry should be as follows:

Dr. Income Tax Expense 6,720,000

Cr. Deferred Tax Liability 6,720,000

Because you believe you are correct, you have asked Bridget to clarify her stance on her journal entry. During Bridget's visit to your office, Bridget is confused because at her tax for accounting director's training class the instructor mentioned that the expected tax rate in the next few years was going to increase due to the ballooning federal debt and the instructor expects that the tax rate for corporations to be 30%.

You believe this is a measurement issue.

Who is correct in this situation, Bridget or your audit staff and why? What accounting standards codification are you relying on for in reviewing this tax situation? (You must cite the accounting standards codification and list the reasons why one is correct versus another).