Improved Methods for the Valuation of Deferred Tax Assets : An important step in the removal of ¿red herrings¿ from the financial statements

João Marques Silva

ISBN 10: 620341025X / ISBN 13: 9786203410259

Editore: LAP LAMBERT Academic Publishing, 2021

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nach der Bestellung gedruckt Neuware - Printed after ordering - Deferred tax asset (DTA) is a tax/accounting concept that refers to an asset that may be used to reduce future tax liabilities of the holder. In the banking sector, it usually refers to situations where a bank has either overpaid taxes, paid taxes in advance or has carry-over of losses. In fact, accounting and tax losses may be used to shield future profits from taxation, through tax loss carry-forwards. DTAs are contingent claims, whose underlying assets are banks future profits. The correct approach to value such rights implies necessarily, the use of a contingent claim valuation framework. One common practice consists in valuing DTAs as though they would be used at 100% without even discounting for the time value of money. Another common procedure consists in considering a subjective 'valuation allowance', valuing the deferred tax asset as a certain percentage of the corresponding maximum value, according to future expectations on the company's financial performance. The purpose of this book is exactly to propose a precise and conceptually sound mathematical approach to value DTAs, considering future projections of earnings and rates, alongside the DTA's legal time limit.

Codice articolo 9786203410259

Dati bibliografici

• Titolo: Improved Methods for the Valuation of Deferred Tax Assets : An important step in the removal of ¿red herrings¿ from the financial statements
• Editore: LAP LAMBERT Academic Publishing
• Data di pubblicazione: 2021
• Lingua: Inglese
• ISBN 10: 620341025X
• ISBN 13: 9786203410259
• Rilegatura: Taschenbuch
• Condizione: Neu
• Dimensioni: 220 L x 150 A x 4 P (millimetri) 220 millimetri di larghezza per 150 millimetri di altezza per 4 millimetri di profondità
• Peso: 96 grammi

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Riassunto

Deferred tax asset (DTA) is a tax/accounting concept that refers to an asset that may be used to reduce future tax liabilities of the holder. In the banking sector, it usually refers to situations where a bank has either overpaid taxes, paid taxes in advance or has carry-over of losses. In fact, accounting and tax losses may be used to shield future profits from taxation, through tax loss carry-forwards. DTAs are contingent claims, whose underlying assets are banks future profits. The correct approach to value such rights implies necessarily, the use of a contingent claim valuation framework. One common practice consists in valuing DTAs as though they would be used at 100% without even discounting for the time value of money. Another common procedure consists in considering a subjective “valuation allowance”, valuing the deferred tax asset as a certain percentage of the corresponding maximum value, according to future expectations on the company’s financial performance. The purpose of this book is exactly to propose a precise and conceptually sound mathematical approach to value DTAs, considering future projections of earnings and rates, alongside the DTA’s legal time limit.