Question

Under both GAAP and IFRS, the balances in the deferred tax accounts on the balance sheet are always classified as non-current.

a-true
b-false

Answer 1

Option b-False is correct answer. Both under GAAP and IFRS, the balances in the deferred tax accounts on the balance sheet can be classified as either current or non-current.

Step-by-step explanation:

False. Both under GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards), the balances in the deferred tax accounts on the balance sheet can be classified as either current or non-current, depending on the timing of the related tax liabilities or assets.

Deferred tax accounts represent the temporary differences between the tax liability or asset recognized for financial reporting purposes and the tax liability or asset recognized for tax purposes. These temporary differences can result in future tax benefits or obligations, and they are classified as current or non-current based on when they are expected to reverse.

For example, if a temporary difference is expected to reverse within one year, it is classified as current. On the other hand, if a temporary difference is expected to reverse after one year, it is classified as non-current.