A company's provision for income taxes resulted in effective tax rates attributable to loss from continuing operations before cumulative effect of change in accounting principles that varied from the statutory federal income tax rate of 34 percent, as summarized in the table below.

Th e $357,000 adjustment in 2007 most likely resulted in:

A. an increase in deferred tax assets.

B. an increase in deferred tax liabilities.

C. no change to deferred tax assets and liabilities.