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Ray Meadows, CFA

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  • Understanding American Capital's 2011 Results [View article]
    I want to clarify a possible misunderstanding about tax accounting. To the extent that they eliminate reserves against their deferred tax asset they are bringing the tax benefits into the current accounting period. This will NOT boost income in future periods - that would be double counting. Taxes in the future will be recognized as a reduction in net income - with the "payment" coming by reducing the deferred tax asset. To the extent that there are remaining reserves against the tax assets, they could boost earnings by reducing these reserves.
    Mar 2, 2012. 02:16 PM | Likes Like |Link to Comment
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