FASB #96
Deferred tax assets could only exist to the extent of deferred tax liabilities.
- That is, they could offset liabilities but they could not exist themselves.
- For a deferred tax asset to exist alone presumes there will be something (income, future tax liabilities, etc.) for it to offset in the future, i.e., to derive a benefit from.
- A deferred tax asset existing alone was thought to violate conservatism. Any deferred tax asset in excess of deferred tax liabilities was ignored.