18. ABC Company has a deductible temporary difference of €3,000,000 at the end of its first year ofoperations. Its tax rate is 40 percent. ABC has €1,800,000 of income taxes payable. At the end of the firstyear, after a careful review of all available evidence, ABC determines that it is probable that it will notrealize €200,000 of this deferred tax asset. At the end of the second year of operations, ABC Companydetermines that it expects to realize €2,400,000 of this deductible temporary difference in the future. OnABC Company’s statement of financial position at the end of its second year of operations, what is theamount of deferred tax asset?
(A) €880,000.
(B) €960,000.
(C) €1,040,000.
(D) €1,200,000