Disney has shown to deduct the valuation allowance at

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Unformatted text preview: ir deferred tax assets in their footnotes. Disney has shown to deduct the valuation allowance at the bottom of the table, after it has netted its gross deferred tax assets against its gross deferred tax liabilities. 4. Disney reports a net deferred tax liability of $679 million. How is this amount reflected on Disney’s balance sheet? • Recall that Disney is required to net its current deferred tax assets against its current deferred tax liabilities, and its long-term deferred tax assets against its long-term deferred tax liabilities. In doing this, Disney reports a current deferred tax asset and a long-term deferred tax liability on its 2009 balance sheet (in millions): o Current assets: Deferred income taxes: $1,140 o Long-term liabilities: Deferred income taxes: $1,819 o Net deferred tax liability (as reported in note): $ 679 5. Speculate as to why Disney reports in its income taxes footnote “depreciable, amortizable and other property” as a deferred tax liability rather than a deferred tax asset. • When a company depreciates an asset more quickly for tax purposes than for financia...
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