A Corporation Must Recognize a Valuation Allowance, If Based on Available

question 21

True/False

A corporation must recognize a valuation allowance, if based on available evidence; it is more likely than not that the deferred liability will not be realized.

---

Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was put into use, reflecting its decrease in value over time.

Net Income

The remaining profit of a corporation once every expense, tax, and additional cost is deducted from the overall revenue.

Amortization Expense

The gradual write-off of the cost of an intangible asset over its useful life.

Equity-Method

An accounting technique used to record investments in affiliate companies, where the investment is initially recorded at cost and adjusted thereafter for the investor's share of the investee's profits or losses.