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?

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Definitions:

Changes

involve alterations, modifications, or transformations in conditions, situations, or objects over time.

Fusiform Shape

A streamlined, spindle-shaped body design seen in many aquatic animals, reducing water resistance and enabling faster movement.

Sharks

A group of elasmobranch fish characterized by their cartilaginous skeletons, five to seven gill slits on the sides of the head, and pectoral fins that are not fused to the head.

Whales

Large marine mammals belonging to the order Cetacea, known for their intelligence, social nature, and in many species, their impressive size.