Which of the following is not true regarding a subsidiary's tax loss carryovers in an acquisition?
A)The resulting deferred tax asset should be considered when determining the amount of goodwill.
B)The parent will always be able to use a portion of the tax loss carryovers in the current period.
C)A valuation allowance should be provided if it is probable the benefit will not be used.
D)the resulting deferred tax asset should be separated into current and noncurrent components.

Question

Quizplus · Accepted Answer

The parent may not be able to use a portion of the tax loss carryovers in the current period for a number of reasons including the lack of taxable income or the circumstances of the acquisition do not meet IRS requirements for the parent to be able to do so.

Which of the Following Is Not True Regarding a Subsidiary's