As a result of differences between depreciation for financial reporting purposes and tax purposes, the tax basis of a company's plant assets exceeded the financial reporting basis. assuming the company had no other temporary differences, the company should report a:

Deferred Tax Liability

Explanation:

Generally corporate organisations report 'deferred tax asset' when the temporary difference will benefit them in the future. This occurs when the companies have reported more profit in their financial books and hence a higher 'tax expense' than is computed in tax accounting as 'tax payable'. On the other hand a deferred tax liability arises when the company has made itself believe that it will need to pay less tax (lower tax expense) than actual 'tax payable' when computed in tax accounting.

In the question above, the assets tax basis being smaller means that the company has underestimated revenue gained from that asset, as a result; it must have reported a lesser 'gain on disposal' hence its tax expense is somehow lower than tax payable and will give rise to a deferred tax liability.

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