Expect More Scrutiny for Deferred Tax Assets
Compliance Week › Vol. 6 Nbr. 71, December 2009
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Summary
In the current year, ABC Company introduces a new product line. Based on the anticipated success of this product line, ABC Company expects to "turn the corner" and become profi table in three years. Additionally, due to appreciation in the real estate market, ABC Company's investment in a shopping mall property is now valued at approximately $500,000 more than the carrying amount in its fi nancial statements.
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Expect More Scrutiny for Deferred Tax Assets
With losses mounting at many companies and forecasts offering scant hope for recovery, auditors are starting to ask hard questions about the deferred tax assets companies are reporting.
"This is defi nitely a big problem for companies right now," says Rick Martin, vice president at Pluris Valuation Advisors.A deferred tax asset is...See the full content of this document
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