it says one way to compute the FFO formula includes adjustment for deferred tax liabilities.
Do we not adjust for deferred tax assets, because this represent a cash flow for taxes to be incurred in the future?
Mostly, the text uses ‘economically questionable’, because those deferred tax liabilites may not actually eventuate, so when accounting how much money you’ve received from operations (FFO), instead of deducting this as it was in accounting profit, we just add it back because it’s ‘economically questionable’ as to whether the outgoing will eventuate.
It’s the same really for depreciation, it doesn’t represent the economically reality, so we add it back.
so we would keep deduction on our P/L for the deferred tax assets? Since this represents a cash flow?