Improved Methods for the Valuation of Deferred Tax Assets
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Improved Methods for the Valuation of Deferred Tax Assets

Improved Methods for the Valuation of Deferred Tax Assets


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About the Book

Deferred tax asset (DTA) is a tax/accounting concept that refers to an asset that may be used to reduce future tax liabilities of the holder. In the banking sector, it usually refers to situations where a bank has either overpaid taxes, paid taxes in advance or has carry-over of losses. In fact, accounting and tax losses may be used to shield future profits from taxation, through tax loss carry-forwards. DTAs are contingent claims, whose underlying assets are banks future profits. The correct approach to value such rights implies necessarily, the use of a contingent claim valuation framework. One common practice consists in valuing DTAs as though they would be used at 100% without even discounting for the time value of money. Another common procedure consists in considering a subjective "valuation allowance", valuing the deferred tax asset as a certain percentage of the corresponding maximum value, according to future expectations on the company's financial performance. The purpose of this book is exactly to propose a precise and conceptually sound mathematical approach to value DTAs, considering future projections of earnings and rates, alongside the DTA's legal time limit.


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Product Details
  • ISBN-13: 9786203410259
  • Publisher: KS Omniscriptum Publishing
  • Publisher Imprint: LAP Lambert Academic Publishing
  • Height: 229 mm
  • No of Pages: 52
  • Spine Width: 3 mm
  • Width: 152 mm
  • ISBN-10: 620341025X
  • Publisher Date: 10 Feb 2021
  • Binding: Paperback
  • Language: English
  • Returnable: N
  • Weight: 141 gr


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Improved Methods for the Valuation of Deferred Tax Assets
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Improved Methods for the Valuation of Deferred Tax Assets
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