Which of the following are true about Deferred Tax Assets? (check all that apply)

Deferred Tax Assets are created when, “Initially, tax rules require smaller expenses than GAAP”; thus, the company pays more taxes, which they will then save in the future. “In the future, tax rules require bigger expenses than GAAP”, which decreases Taxable Income and the amount of taxes paid, providing the savings. DTLs “represent an obligation to make higher tax payments in the future,” whereas DTAs represent future tax savings.

Deferred Tax Assets are created when, “Initially, tax rules require smaller expenses than GAAP”; thus, the company pays more taxes, which they will then save in the future. “In the future, tax rules require bigger expenses than GAAP”, which decreases Taxable Income and the amount of taxes paid, providing the savings. DTLs “represent an obligation to make higher tax payments in the future,” whereas DTAs represent future tax savings.