TS insights: Financial reporting in an uncertain economy: A closer look at income tax valuation allowances

TS insights
Download Financial reporting in an uncertain economy: A closer look at income tax valuation allowances

The interpretation of accounting requirements for deferred tax assets has historically been (and continues to be) one of the most judgmental areas of accounting in practice. In today's uncertain economy, focus has heightened on income tax valuation allowance assessments by companies and their auditors, as well as the Securities and Exchange Commission staff, through the issuance of comment letters.

Companies need to understand the valuation allowance accounting model and consider whether updates to accounting policy disclosures are necessary in order to reduce risk and assure the quality of financial reporting.