Kriyati Corp. is a private company that is strongly considering going public in the near future. In 20X9 it has a taxable loss of $10,000,000. For the prior three years Kriyati Corp. had taxable profits of $2,000,000 (20X6), $5,000,000 (20X7), and $1,000,000 (20X8). The 20X9 loss is the result of an overhaul of one of the company’s most popular products. Since offering the improved product, customer response has been incredibly strong. Sales forecasts of the product reveal an expected 200% increase, which will translate into profit.
Kriyati Corp.’s tax rates for the last few years were 38% (20X6), 39% (20X7), and 40% (both 20X8 and 20X9). Kriyati currently uses the taxes payable method of accounting for income taxes.
The company has had one instance of tax losses expiring without being used, 15 years ago.

Required:
1. Discuss what amounts will be carried back relating to the 20X9 taxable loss and how much can be recovered in taxes actually paid.
2. How much carryforward remains after carrying back the losses three years?
3. Discuss whether use of the tax loss carryforward is probable or not. Provide support for both sides and conclude.
4. How would the accounting for the loss differ if Kriyati Corp. goes public?