Placard, a Multinational Corporation Based in the U

question 163

Essay

Placard, a multinational corporation based in the U.S., has used ASC 740-30 (APB 23) to avoid reporting any U.S. deferred tax expense on $50 million of the earnings of its foreign subsidiaries. All of these subsidiaries operate in countries with lower tax rates than those of the U.S. When the profits eventually are repatriated, how is Placard's effective tax rate affected on its GAAP financial statements?

---

Definitions:

Mesonephros

An embryonic kidney that serves as an interim kidney while the final kidney (metanephros) is forming in vertebrates.

Neural Tube

Tube formed from the neuroectoderm by the closure of the neural groove; develops into the spinal cord and brain.

Neural Plate

Region of the dorsal surface of the embryo that is transformed into the neural tube and neural crest.

Primitive Streak

An early structure that forms in the developing embryo, crucial for the process of gastrulation and establishing the body plan of the organism.