Hi allIn the country lowers the tax rate, does it not effect the previous years DTA and DTL?

@maboi_1da Yes, as far as I know. If corporate tax rate is lowered, DTL will experience an immediate, one-time adjustment, a decrease to the balance sheet and increase in earnings in the income statement. DTA will experience the opposite.

The adjustment happens immediately, so only current year.

A CFA Level 1 Discussion About Change In Tax Rate

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This topic has 3 replies, 2 voices, and was last updated Jan-186:24 am by hairyfairy.

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- maboi_1da
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  08 Jan 2018 at 4:39 am
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  Hi all
  
  In the country lowers the tax rate, does it not effect the previous years DTA and DTL?
- hairyfairy
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  08 Jan 2018 at 4:56 am
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  @maboi_1da‌ Yes, as far as I know. If corporate tax rate is lowered, DTL will experience an immediate, one-time adjustment, a decrease to the balance sheet and increase in earnings in the income statement. DTA will experience the opposite.
- hairyfairy
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  08 Jan 2018 at 6:24 am
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  The adjustment happens immediately, so only current year.
- maboi_1da
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  08 Jan 2018 at 5:30 am
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  do the effect occur on the current year? or do I have to make adjustment to previous years
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