An operating loss occurs when tax-deductible expenses exceed taxable revenues. Tax laws permit the operating loss to

Question:

An operating loss occurs when tax-deductible expenses exceed taxable revenues. Tax laws permit the operating loss to be used to reduce taxable income in other, profitable years by either a carryback of the loss to prior years or a carryforward of the loss to later years. How are loss carrybacks and loss carryforwards recognized for financial reporting purposes?