Davida Limited started operations in early $2019.$ Although it has grown steadily, the company reported accumulated operating losses of $$450,000$ in its first four

years in business. In the most recent year $(2023),$ Davida appears to have turned the corner and reported modest taxable income of $$30,000.$ In addition to a

deferred tax asset related to its net operating loss, Davida has recorded a deferred tax asset related to product warranties and a deferred tax liability related to

accelerated depreciation. Given its past operating results, Davida management has determined that it is not probable that it will realize any of the deferred tax

assets. However, given its improved performance, management wonders whether it can retain its deferred tax assets. Management would like you to conduct

some research on the accounting for recognition of the deferred tax assets.