单选题 Which of the following situations will most likely require a company to record a valuation allowance on its balance sheet? A. To report depreciation, a firm uses the double-declining balance method for tax purposes and the straight-line method for financial reporting purposes. B. A firm with deferred tax assets expects an increase in the tax rate. C. A firm is unlikely to have future taxable income that would enable it to take advantage of deferred tax assets.

【正确答案】 C

【答案解析】A valuation allowance is a contra account (offset) against deferred tax assets that reflects the likelihood that the deferred tax assets will never be realized. If a firm is unlikely to have future taxable income, it would be unlikely to ever use its deferred tax assets, and therefore must record a valuation allowance.