Question: On December 31, Year 1, a publicly traded entity identified a tax position that will result in a tax benefit of $100,000 that qualifies for
On December 31, Year 1, a publicly traded entity identified a tax position that will result in a tax benefit of $100,000 that qualifies for measurement and should be recognized. The entity has considered the amounts and possible outcomes of the position held by examining them as follows:
possible estimated result | individual probability of occurrence | cumulative probability of occurrence | |||
$100,000 | 20% | 20% | |||
30,000 | 35% | 55% | |||
10,000 | 45% | 100% | |||
100% |
What amount should be recognized as a tax benefit as of December 31 of year 1?
Step by Step Solution
3.47 Rating (160 Votes )
There are 3 Steps involved in it
To determine the amount of tax benefit to be recognized we need to use the expected value app... View full answer
Get step-by-step solutions from verified subject matter experts
Study Help