Below is part of the tax footnote for Ford Motor Comapny: 2021 Deferred tax assets Employee benefit
Question:
Below is part of the tax footnote for Ford Motor Comapny:
2021 | |||
Deferred tax assets | |||
Employee benefit plans | $ | 2,320 | |
Net operating loss carryforwards | 4,163 | ||
Tax credit carryforwards | 10,437 | ||
Research expenditures | 1,117 | ||
Dealer and dealers’ customer allowances and claims | 1,944 | ||
Other foreign deferred tax assets | 2,005 | ||
All other | 2,353 | ||
Total gross deferred tax assets | 24,339 | ||
Less: Valuation allowances | -1,067 | ||
Total net deferred tax assets | 23,272 | ||
Deferred tax liabilities | |||
Leasing transactions | 2,103 | ||
Depreciation and amortization (excluding leasing transactions) | 2,881 | ||
Finance receivables | 756 | ||
Carrying value of investments | 2,149 | ||
Other foreign deferred tax liabilities | 893 | ||
All other | 2,275 | ||
Total deferred tax liabilities | 11,057 | ||
Net deferred tax assets/(liabilities) | $ | 12,215 |
From this footnote we can infer:
a. Future book income will be higher than future taxable income because there is net deferred tax liability.
b. Current book income is lower than taxable income because there is net deferred tax asset.
c. Future book income will be lower than future taxable income because there is net deferred tax asset.
d. Current book income is higher than taxable income because there is net deferred tax liability.
e. We cannot infer anything from the relative book and tax income from this information.
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson