A deferred tax asset for deductible temporary differences expected to be realized by carry-back would be measured using the tax law and rates for the…

The statement is false. A deferred tax asset realized through a carry-back is a claim for a refund of taxes paid in a prior period. Therefore, it must be measured using the enacted tax laws and rates that were applicable to that specific prior period (the carry-back year). The tax rate in effect during the year the refund is physically received or "realized" is not relevant for the measurement of the asset, as the refund amount is determined by the taxes originally paid in the past.

A. True: This is incorrect. The measurement is based on the tax rates of the prior year to which the deduction is carried back, not the future year in which the refund is received.

1. FASB Accounting Standards Codification (ASC) 740, Income Taxes. ASC 740-10-30-8 requires measurement using the enacted tax rate for the periods in which differences are expected to reverse. For a carry-back, the "reversal" or realization is against a prior period's income, thus mandating the use of that prior period's rates.

2. Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2022). Intermediate Accounting (18th ed.). Wiley. Chapter 19, "Accounting for Income Taxes," explicitly states that the tax benefit from a net operating loss carry-back is computed using the tax rates in effect during the loss carry-back years, as it represents a refund of taxes paid in those years.

3. International Accounting Standard (IAS) 12, Income Taxes. Paragraph 47 states that deferred tax assets are measured at the tax rates expected to apply to the period when the asset is realized. In a carry-back scenario, the asset is "realized" against the taxable profit of a prior period, making that prior period's rates the appropriate measure.