A cumulative financial accounting (book)loss over three years (36 consecutive months)likely would be considered significant negative evidence in a valuation allowance analysis.

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A cumulative financial accounting loss over an extended period of time is considered significant negative evidence in a valuation allowance analysis, as it indicates that the company may not generate sufficient future taxable income to utilize its deferred tax assets. This is because a valuation allowance is recorded to reduce the carrying value of deferred tax assets when it is more likely than not that a significant portion of the deferred tax assets will not be realized.

A Cumulative Financial Accounting (Book)loss Over Three Years (36 Consecutive