Entity A expects to receive $5,000,000 in tax credits if it meets its emissions regulations in the upcoming year. Should this $5,000,000 be recognized as an asset in the current year?
A) Yes
B) No

Question

Quizplus · Accepted Answer

The $5,000,000 in tax credits should not be recognized as an asset in the current year because it is contingent on future events (meeting emissions regulations), and recognition of such assets requires certainty.

Entity a Expects to Receive $5,000,000 in Tax Credits If