Classification of Deferred Tax Accounts

Question 1

How are deferred tax account classifications made?

Answer 1

Based on the item giving rise to it. Ex. If temp is current then DTA is current

Question 2

If a DTA/DTL is not related to a BS account, then how is the classification determined?

Answer 2

Based on the period it is expected to reverse.

Question 3

How are deferred tax accounts offset for reporting?

Answer 3

Current accounts are offset; noncurrent accounts are offset; two net accounts remain for reporting

Question 4

List the four internal deferred tax accounts possible.

Answer 4

Classified separately, therefore:

1. )Current deferred tax asset;
2. )Noncurrent deferred tax asset;
3. )Current deferred tax liability;
4. ) Noncurrent deferred tax liability

Question 5

How is the DTA/DTL related to Fixed Assets classified?

Answer 5

As non-current, even if part of the DTA/DTL is expected to reverse next year, the asset it relates to is still non-current, therefore it is non-current