contestada

The basic issue in deciding whether to record a valuation allowance for a deferred tax asset is determining whether it is more likely than not if future taxable income will be sufficient to realize the tax benefit.
Is this true or false?

Respuesta :

anthougo

Answer:

This is true.

Explanation:

ASC 740 requires a valuation allowance to be made when there is a more than 50% probability that the deferred asset may not be utilized  

due to non-availability of sufficient future taxable income.  Valuation allowance, which is a contra-account to the deferred tax asset account, is just like a provision for doubtful debts and offsets a portion of the deferred tax asset.

Otras preguntas