A consolidation adjustment will have a tax effect if:
A) it adjusts the carrying amount of an asset.
B) it adjusts the carrying amount of a liability.
C) it recognises assets and liabilities not recorded in accounting records of group companies.
D) all of the above.

Question

Quizplus · Accepted Answer

Consolidation adjustments can have tax effects regardless of whether they adjust the carrying amounts of assets or liabilities or recognize assets and liabilities not recorded in the accounting records of group companies. These adjustments can affect the consolidated taxable income and, consequently, the tax expense or benefit recognized in the consolidated financial statements.

A Consolidation Adjustment Will Have a Tax Effect If