Reporting deferred taxes; Ford Motor Company
Response to the following problem:
Access the financial statements and related disclosure notes of Ford Motor Company from its website at corporate.ford.com. In Ford's balance sheet, deferred income taxes in 2013 are reported as both a current asset ($13,315 million) and a noncurrent liability ($598 million).
Required:
1. Explain why deferred income taxes can be reported as both an asset and a liability. Is that the case for Ford in 2013?
2. Note 22 in the disclosure notes indicates that net deferred tax assets are $20,101 million and deferred tax liabilities are $7,384 million as of December 31, 2013. How can that be explained in light of the two amounts reported in the balance sheet?
3. Does Ford feel the need to record a valuation allowance for its deferred tax assets?