If a deferred tax asset may not be fully realized in future periods,a valuation allowance is required to reduce the deferred tax asset to the amount that is more likely than not to be realized.

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This is a true statement. A valuation allowance is required when it is more likely than not that some or all of the deferred tax asset will not be realized. The allowance reduces the deferred tax asset to the amount that is more likely to be realized.

If a Deferred Tax Asset May Not Be Fully Realized