According to FASB ASC 740-10-30-18 there are four possible sources of future taxable income that can be considered in determining the realization of future tax benefits. Those sources are: future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in prior carryback year, and tax strategies that would be used in order to a.) Accelerate taxable amounts to utilize expiring carryforwards, b.) Change the character of the taxable or deducible amounts from ordinary income or loss to capital gain or loss, or c.) Switch from tax exempt to taxable investments. Now, looking at LOL draft tax footnote there are three taxable temporary differences and the only one that should be considered is depreciation. This is because it is currently reversing and the taxable amounts are decreasing every year and in turn increasing the tax benefit. The trademark cannot be considered as taxable income because it is too difficult to determine when the reversal of the liability will take place because of its indefinite nature. And then the prepaid expenses can’t be considered as well because they do not seem to be reversing and it is difficult to set a schedule up of taxable prepaid expenses because of the inability to predict and layout projections of future amounts. As FASB ASC 740-10-30-17 states, “all available evidence shall be considered in determining whether a valuation allowance for DTA’s is needed”, so therefore relevant information that can be weighed as positive evidence should be compared to the amount of negative evidence that is present for LOL. And the two specific components of LOL that we will look at more closely are the impairment of nondeductible goodwill and the receivable write-off. According to FASB ASC 805-740-25-3 and FASB ASC 740-10-25-3(d), the recognition of a DTL