What Are the Two Exceptions to the Recognition of Deferred

question 9

Multiple Choice

What are the two exceptions to the recognition of deferred tax liabilities for all taxable temporary differences?

• A)The initial recognition of an asset which affects neither profit or loss and is not a business combination; the initial recognition of an asset which has been inherited
• B)The initial recognition of goodwill; the initial recognition of an asset which is required for response to an emergency
• C)The initial recognition of an asset which is required as a response to an emergency; the initial recognition of an asset which affects neither profit or loss and is not a business combination
• D)The initial recognition of goodwill; the initial recognition of an asset which affects neither profit nor loss and is not a business combination.

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Definitions:

Plant Size

Refers to the physical capacity or output level of a manufacturing or production facility.

Output Levels

The quantity of goods or services produced by a company, sector, or economy in a given period of time.

Long Run

A period in economics where all factors of production and costs are variable, allowing full adjustment to any change in economic conditions.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, leading to a reduced cost per unit of output.