A valuation allowance is a contra account to an aset, any asset (including DTA, inventory, nontrading securities). An estimation, a management’s belief regarding the amount of nonrealization in the value of the asset. A counter account to asset, any asset.
pepp Wrote: ------------------------------------------------------- > they key to the question is “NON CURRENT > securities” HENCE THIS IS GOING TO BE PART of > compreehnsive income/loss. Yes, Mr Pepp you are right! Thanks a lot!
compare VA’s against competitors for possbile earnings manipulation!
OK, again misled by Schweser notes: The valuation allowance applies exclusively to DTA.
strangedays Wrote: ------------------------------------------------------- > pepp Wrote: > -------------------------------------------------- > ----- > > they key to the question is “NON CURRENT > > securities” HENCE THIS IS GOING TO BE PART of > > compreehnsive income/loss. > > > Yes, Mr Pepp you are right! Thanks a lot! are you kidding me? cuz I am very unsure of my answers.
This is probably a missunderstanding. You USE the valuation allowance of assets to calculate DTA and that’s the only use of a valuation allowance. You don’t make a valuation allowance of DTA, but of assets that you have on your BS when you calculate DTA. hopetobeat Wrote: ------------------------------------------------------- > OK, again misled by Schweser notes: The valuation > allowance applies exclusively to DTA.
pepp Wrote: ------------------------------------------------------- > strangedays Wrote: > -------------------------------------------------- > ----- > > pepp Wrote: > > > -------------------------------------------------- > > > ----- > > > they key to the question is “NON CURRENT > > > securities” HENCE THIS IS GOING TO BE PART of > > > compreehnsive income/loss. > > Nope, in my opinion this is the only possible explanation. > > > > Yes, Mr Pepp you are right! Thanks a lot! > > > are you kidding me? cuz I am very unsure of my > answers.
wouldnt this be like an imparment then map?
“I estimate my asset is worth nothing at expiration” is not the same with saying “I know my asset is impaired”. Valuation allowance is superior to impairment in the food chain, because it gets hit when certainty exists of nonrealization (impairment). Then you would know that the valuation allowance is greater and you would reduce it: you already know you lost. sorry for eating letters
thanks map
Great! Thanks, map map1 Wrote: ------------------------------------------------------- > This is probably a missunderstanding. You USE the > valuation allowance of assets to calculate DTA and > that’s the only use of a valuation allowance. You > don’t make a valuation allowance of DTA, but of > assets that you have on your BS when you calculate > DTA. > > hopetobeat Wrote: > -------------------------------------------------- > ----- > > OK, again misled by Schweser notes: The > valuation > > allowance applies exclusively to DTA.
Thanks for the explanation, map!
I only HOPE I am right. English is not my first language, and I’m not a CPA:)