A COMPANY PURCHASED A €2,000 MILLION LONG-TERM ASSET IN 2012 WHEN...

102. - MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING VERSIONB QUESTIONS 2014
MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING VERSIONB QUESTIONS 2014

102.

A company purchased a €2,000 million long-term asset in 2012 when the corporate tax rate was 30%. (€ millions)Asset’s Year-End Value for 2013 (€ millions) 2012 Accounting purposes 1,800 1,900Tax purposes 1,280 1,600On 15 January 2013, the government lowered the corporate tax rate to 25% for 2013 and beyond. The deferred tax liability (€ millions) as of 31 December 2013, is closest to: A. 130. B. 156. C. 231.