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How do I judge the need for and apply a valuation allowance?

Valuation Allowance
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Jeff Johnson
A valuation allowance is required to be placed on deferred tax assets when it is more likely than not that all or a portion of the deferred tax assets will not be realized. All available evidence, both positive and negative, should be considered to determine whether, based on the weight of that evidence, a valuation allowance is needed. Information about an enterprise’s current financial position and its results of operations for the current and preceding years ordinarily is readily available. That historical information is supplemented by all currently available information about future years.
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