Final answer:
Deferred tax amounts related to specific assets or liabilities should be classified based on the classification of the related asset or liability on the balance sheet. This ensures the T-account, which separates assets from liabilities and equity, remains balanced.
Step-by-step explanation:
The question pertains to the classification of deferred tax amounts that are related to specific assets or liabilities. The amounts should be classified based on the classification of the related asset or liability. This means that if the asset or liability to which the deferred tax amount is related is classified as current on the balance sheet, then the deferred tax should also be classified as current. Conversely, if the asset or liability is noncurrent, then the deferred tax should be classified as noncurrent.
To illustrate this using the T-account format, if an asset appears on the left side of the balance sheet and is considered current, any deferred tax associated with it would be listed as a current asset as well, ensuring that the T-account remains balanced. In this context, the T-account serves as a visual representation where assets are on the left and liabilities and equity, which includes deferred tax accounts, are on the right.