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Financial Reporting & Analysis
Financial Reporting & Analysis
Hard
Ridgecrest Biotech has a $30 million gross DTA with a full $30 million valuation allowance. After FDA approval of a new drug, management releases $20 million of the allowance. What is the impact on the income statement?
A
Tax expense decreases by $20 million, increasing net income by $20 million
B
Revenue increases by $20 million
C
Operating income increases by $20 million
D
No income statement impact; the change only affects the balance sheet
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Tags
#valuation-allowance
#dta
#tax-expense
#earnings-management
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