Schweser and the CFA book say that tax loss carryforwards are booked as a deferred tax asset. Can anyone please explain to me the actual t-accounts behind these entries and how they work?
It is an deferred tax asset which company may incur tax losses and be able to “carry forward” losses to reduce taxable income in future years…
I’m not sure but based on my understanding, it would be Debit Deferred tax asset xx Credit Income tax expense xx