Final answer:
A deferred tax asset for an operating loss carryforward is measured using the tax rate enacted or substantively enacted at the balance sheet date. This rate is determined based on the jurisdiction in which the corporation operates.
Step-by-step explanation:
A deferred tax asset for an operating loss carryforward is measured using the tax rate enacted or substantively enacted at the balance sheet date. This means that the corporation should use the tax rate that is legally or practically already in place. The tax rate is determined based on the jurisdiction in which the corporation operates.
For example, let's say a corporation has an operating loss carryforward of $100,000 and the tax rate in their jurisdiction is 25%. The corporation would measure the deferred tax asset as $25,000 (25% of $100,000). This means that they can use this asset to offset future taxable income and reduce their tax liability.