All of the following are evidence to support recognition of a deferred income tax benefit except:
A)An excess of fair value over the tax basis of the enterprise's net assets in an amount sufficient to realize the deferred income tax asset.
B)There are existing taxable temporary differences to absorb the loss.
C)It is acceptable industry practice to recognize the deferred income tax benefit.
D)A strong earnings history suggesting that losses are not expected to continue.

Question

Quizplus · Accepted Answer

Recognition of a deferred income tax benefit is based on the ability to realize the benefit, which is typically evidenced by items such as excess of fair value over tax basis, existing taxable temporary differences, and a strong earnings history. Acceptable industry practice, however, is not a basis for recognizing a deferred income tax benefit, as tax accounting is governed by tax laws and accounting standards rather than industry practices.

All of the Following Are Evidence to Support Recognition of a Deferred