A company reported $17 million of tax benefits recoverable in its November 30, 20X1, balance sheet and a like amount in its earnings statement for the year then ended. The tax benefit represented approximately 30 percent of net income and was measured by using the enacted marginal tax rate applicable in the period that Westin expected to realize the tax benefit. Company could not carry back the current year net operating loss because taxable income in the prior year’s eligible for carry-back had previously been offset by a net operating loss deduction.
Assuming that it is appropriate for Company to recognize the tax benefit of the operating loss in its November 30, 20X1, financial statements, identify how the tax benefit should be reported.