The admitted portion of DTA under SAP equals which of the following?

Prepare for the CAS Exam 6 with detailed study materials. Use flashcards and multiple-choice questions, each with hints and explanations, to get exam-ready!

Multiple Choice

The admitted portion of DTA under SAP equals which of the following?

In SAP, only the portion of a deferred tax asset that you expect to reverse in the near term is admitted as an asset. That means the admitted amount is tied to what will actually realize in the upcoming year. Since the recoverability of the tax benefit is most certain in the near term, the admitted portion equals the amount of DTA expected to reverse in the upcoming year. Any additional DTA expected to reverse later is not admitted and remains nonadmitted on the statutory balance sheet. For example, if the DTA is 100 and 40 is expected to reverse next year, the admitted DTA is 40. The other statements describe reversals in later years, offsetting with DTLs, or the total DTA, which do not reflect how SAP determines the admitted portion.

In SAP, only the portion of a deferred tax asset that you expect to reverse in the near term is admitted as an asset. That means the admitted amount is tied to what will actually realize in the upcoming year. Since the recoverability of the tax benefit is most certain in the near term, the admitted portion equals the amount of DTA expected to reverse in the upcoming year. Any additional DTA expected to reverse later is not admitted and remains nonadmitted on the statutory balance sheet. For example, if the DTA is 100 and 40 is expected to reverse next year, the admitted DTA is 40. The other statements describe reversals in later years, offsetting with DTLs, or the total DTA, which do not reflect how SAP determines the admitted portion.

More practice questions