This chapter provides guidance on the amount at which an entity should measure a tax asset in its financial statements when the recognition criteria for that asset or liability have been met in accordance with ASC 740. Specifically, this chapter focuses on how to evaluate DTAs for realizability and when a valuation allowance would be appropriate. As the complexity of an entity’s legal structure and jurisdictional footprint increases, so do the challenges related to measuring tax assets and liabilities. However, the guidance in this chapter applies equally to highly complex organizations as well as to simple entities that operate in a single jurisdiction.
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This publication provides comprehensive guidance; however, it does not address all possible fact patterns, and the guidance is subject to change. Consult a Deloitte & Touche LLP professional regarding your specific issues and questions.