Hi, I'm working on a project and I'm stuck on an accounting issue.
*company has a big balance of NOL's
*They took a valuation allowance reversal and it said:
While the reversal of the valuation allowance had a material positive effect on the Company’s results of operations for the year ended December 31, 2013, the reversal will have the effect of reducing the Company’s net income in subsequent periods as a result of an increase in the provision for income taxes relating to anticipated positive operating results in such periods. As a result of the Company's realization of its deferred tax assets from net operating losses, the increase in the provision for income taxes will have a limited impact on the Company's cash outflows until such time as the net operating losses are fully utilized
*On a GAAP basis, forecasters for 2014 and 2015 have them paying taxes
Can someone really dumb this down for me? I thought if a company has an NOL it shields them from paying taxes. How did the reversal change things? I'm unsure on how they will be able to utilize the NOL now?
thanks!
*company has a big balance of NOL's
*They took a valuation allowance reversal and it said:
While the reversal of the valuation allowance had a material positive effect on the Company’s results of operations for the year ended December 31, 2013, the reversal will have the effect of reducing the Company’s net income in subsequent periods as a result of an increase in the provision for income taxes relating to anticipated positive operating results in such periods. As a result of the Company's realization of its deferred tax assets from net operating losses, the increase in the provision for income taxes will have a limited impact on the Company's cash outflows until such time as the net operating losses are fully utilized
*On a GAAP basis, forecasters for 2014 and 2015 have them paying taxes
Can someone really dumb this down for me? I thought if a company has an NOL it shields them from paying taxes. How did the reversal change things? I'm unsure on how they will be able to utilize the NOL now?
thanks!