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Valuation allowance for deferred tax assets – the basics
- 4:35 - Weighing evidence from recent years. We start with how to think about positive and negative evidence and cumulative losses in recent years.
- 10:00 - Projections of income and what is "objectively verifiable." Kassie discusses how companies are required to consider all four sources of potential taxable income when evaluating the realization of deferred tax assets and weigh the available positive and negative evidence.
- 15:09 - Tax planning strategies. Heather and Kassie talk about how to assess available prudent and feasible tax planning strategies, and the importance of real-time documentation of judgments.
- 18:42 - Common misconceptions. You might need a valuation allowance even when the company is in a net DTL position. And indefinite carryforwards don’t get you off the hook, either. Kassie explains.
- 22:19 - Valuation allowance reversal. Kassie switches gears to end with a discussion about what listeners should know about when to release a valuation allowance.
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PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.