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Basic Question 9 of 20
A firm that has never been profitable would likely choose to carry forward an operating loss up to twenty years. True or False?
User Contributed Comments 10
| User | Comment |
|---|---|
| stranger | in this situation the adjustment will be made in the future years |
| kalps | 20 year carry forward allowed under US tax rules |
| AdriGul | 20 years tax loss carry forward?? I though it was limited to 2 back and 5 forward. |
| Nightsurfer | I just looked online. Apparently, it is 20 years. |
| chamad | It really depends on the local tax law. |
| magicchip | 20 in the US |
| johntan1979 | Isn't that amazing? (Sarcastic tone) Take out all the leverage risk you want, make huge losses, let big GOV bail you out with taxpayers' money, and pay no taxes for 20 years. |
| Inaganti6 | @Johntan1979 Rob a store go to jail. Run a massive corporation into the ground, pay no price. When you do naughty things, better have the law on your side ;) |
| jfermin315 | sounds like Trump work |
| Ewan2015 | This has changed under new tax law is indefinite but if never profitable this should be false as it is unlikely that they have sufficient objective evidence of a future tax profit that would allow them to use the NOL therefore they should have a full VA. |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
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Learning Outcome Statements
explain how deferred tax liabilities and assets are created and the factors that determine how a company's deferred tax liabilities and assets should be treated for the purposes of financial analysis
CFA® 2024 Level I Curriculum, Volume 3, Module 9.