Creation of the deferred tax asset valuation allowance account is subjective and therefore provides management the opportunity to manipulate income.

Question

Quizplus · Accepted Answer

The creation of the deferred tax asset valuation allowance account involves management's judgment, and therefore it is subjective. As a result, there is a risk that management may manipulate income by adjusting the allowance account to reduce income tax expenses.

Creation of the Deferred Tax Asset Valuation Allowance Account Is