Problem
A company begins the fiscal year without either a deferred tax asset or a deferred tax liability.
a) The Total Revenues under GAAP are $300 million higher than under tax reporting.
b) The Total Expenses (excluding the tax expense) under GAAP are $500 million higher than under tax reporting.
Assuming a tax rate of 20% and no permanent differences, will the company report a deferred tax asset or liability on the Balance Sheet at year end and in what amount?