View the step-by-step solution to:

There is no recognition of a deferred tax item in respect to goodwill because it is a residual amount and the recognition of a deferred tax item...

There is no recognition of a deferred tax item in respect to goodwill because it is a residual amount and the recognition of a deferred tax item would:

 A.decrease the carrying amount of goodwill; B.increase the carrying amount of goodwill; C.decrease the net profit on consolidation;; D.increase the net profit on consolidation.


Answer: B. Why?

Top Answer

First we have to understand 'Taxable Temporary Difference'. Temporary differences are differences between the carrying value... View the full answer

1 comment
  • I understand Taxable Temporary Difference, and that the difference between the CA of goodwill and its TB will lead to a taxable temporary difference and eventually DTL. However, how does DTL increase the CA of goodwill?
    • lia_g
    • Nov 02, 2018 at 3:07am

Sign up to view the full answer

Other Answers

B. increase the... View the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online