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recognition/ allowance for tax assets
Marquelle-30059 - 09/5/2018, 8:59 pm

Wouldn't you recognize the 90k tax asset no matter what in year one and simply reduce it by an allowance account if it is not more likely then not that there will be income to use it in future years?

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Nick - 09/14/2018, 8:50 pm

It must be more likely than not (greater than 50% chance of happening) that there will be enough taxable income to cover the expense when it is incurred before you can take the deduction/use the deferred asset. If there is a 50% or less chance, the company cannot take the deduction because it is more likely that there will not be enough taxable income to cover the expense.

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