KLH company reported the following: - Gross DTA at the beginning of the year $10500 -Gross DTA at the end of the year $11250 -Valuation allowance at the beginning of the year: $2700 -Valuation allowance at the end of the year: $3900 Which of the following statements best describes the expected earnings of the firm? Earnings are expected to: A-increase B-decrease C-remain relatively stable SImply lost by this question. Could you please explain the question with some no. and some analysis. I thanks you friend
Valuation allowance increasing means that NTA falls. The company expects lower future profits. It doesn’t feel it can actually realize these tax assets. Where is this question from?
This is from Schweser and the answer is B. Please elaborate. Thanks my friend.