Which of the following statement concerning deferred tax assets is false?

A. Deferred tax assets relate to future tax deductions.
B. Deferred tax assets will always be realized to generate future positive cash flow.
C. The reversal of a deferred tax asset valuation allowance generates additional current period income.
D. Taxable losses can be carried back to offset prior years' taxable income and realize a tax refund, and can be carried forward to offset future years' taxable income and reduce tax liability.

Correct Answer: B

Deferred tax assets are future deductions that will result in increases in cash flows only if the company has future taxable income against which to offset these deductions. If the realizability of these tax benefits is in question, the company must establish a valuation account to reduce these tax assets to their estimated realizable value.