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Politics : Formerly About Advanced Micro Devices
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To: Dan3 who wrote (80479)11/19/1999 2:09:00 PM
From: Greater Fool   of 1581221
 
Tax loss carryforwards are deferred tax assets and are "depreciated" as future earnings come in.

The assets are generated when the income statement recognizes a credit (negative income tax on the losses), which is of course not paid by the IRS. In effect, the IRS owes AMD money.

When the company becomes profitable, the income statement recognizes the profit and the tax, but no cash is paid to the IRS.

The deferred tax asset would have cash value to an acquirer, just like all the current assets such as cash, securities, and accounts receivable.
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