At December 31, 2021, Moonlight Bay Resorts had the following deferred income tax items: Deferred tax asset of $102 million related to a current liability Deferred tax asset of $60 million related to a noncurrent liability Deferred tax liability of $168 million related to a noncurrent asset Deferred tax liability of $120 million related to a current asset Moonlight Bay should report in its December 31, 2021, balance sheet a:

Question

Harley Ewing

Business

12 April, 07:31

At December 31, 2021, Moonlight Bay Resorts had the following deferred income tax items: Deferred tax asset of $102 million related to a current liability Deferred tax asset of $60 million related to a noncurrent liability Deferred tax liability of $168 million related to a noncurrent asset Deferred tax liability of $120 million related to a current asset Moonlight Bay should report in its December 31, 2021, balance sheet a:

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Answers (1)

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Nikolas Randall · Answer 1

Moonligh Bay Resorts will report a Non-current liability of $126 million

Explanation:

The question is to determine whether Moonlight Bay Resorts is to report an asset (current or non-current) or a liability (current or non-current) in its December 31st 2021 Balance Sheet

The step is to determine the classification of the items in the balance sheet

This is done as follows

Description Amount ($)

Total Deferred Tax liability (168 million + 120 million) 288 million

(Deferred tax liabilities related to

both current and non-current assets)

Total Deferred tax asset (102 million + 60 million) (162 million)

The net deferred tax liability 126 million

Since, under the International Financial Reporting Standards Deferred Tax Liability is a Non-current liability, it means Moonligh Bay Resorts will report a Non-current liability of $126 million