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Man Utd & US tax rates watch

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    https://www.bloomberg.com/news/artic...s-tax-overhaul

    out of curiosity, why did the fall in the US tax rate mean that Man Utd had to make a one time write off in their books?

    i've tried to google around and I've found something called deferred tax asset. But can't seem to make the connection, any help would be much appreciated.

    I'm a first-year econ student so please simplify your answer
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    (Original post by PEking)
    https://www.bloomberg.com/news/artic...s-tax-overhaul

    out of curiosity, why did the fall in the US tax rate mean that Man Utd had to make a one time write off in their books?

    i've tried to google around and I've found something called deferred tax asset. But can't seem to make the connection, any help would be much appreciated.

    I'm a first-year econ student so please simplify your answer

    So I think its because they had deferred tax assets and the change in tax rate meant such assets were now worth less, hence the one off charge and write down.
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    (Original post by 999tigger)
    So I think its because they had deferred tax assets and the change in tax rate meant such assets were now worth less, hence the one off charge and write down.
    assuming deferred tax asset means the firm has paid their taxes in advance, surely a reduction in the tax rate means they are due to a refund as they have paid more than what is required now so a write off is not needed?
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    write down of deferred tax assets will hit the PnL (income statements).

    essentially these "assets" are worth less (and has to be recorded somewhere), so it's just written down as a loss (won't actually be any cash losses), but it's just an accounting thing

    would post this in accounting sub-forum
 
 
 
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