hard · Financial Accounting accounting-cycle-financial-statements

Under IFRS (IAS 12), how does the approach to deferred tax assets differ from US GAAP (ASC 740) regarding the use of a valuation allowance?

1. IFRS does not use a valuation allowance; instead, it only recognizes a DTA to the extent that it is probable it will be realized.
2. IFRS requires a valuation allowance only for NOLs, while GAAP requires it for all temporary differences.
3. IFRS uses a 'more likely than not' threshold, whereas GAAP uses a 'virtually certain' threshold.
4. IFRS allows for the discounting of deferred tax assets to present value, which GAAP prohibits.

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