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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?

Relax

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.