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:

Policy Decision

A choice made by a governing body or organization that sets a direction or action based on certain principles or objectives.

Retaliate

To respond to a wrong or injury with a similar action, often with the intent to harm or get even.

Job Performance

The extent to which an employee fulfills their job duties and responsibilities effectively.

Air Canada

Canada's largest airline, providing passenger and cargo transport services domestically and internationally.