Discuss and answer the questions listed below in detail.

1. What is a valuation allowance? Why is it created? Access the balance sheet of a publicly-traded company and discuss how the valuation allowance is reported. Look at the notes to the financials as well.

2. Differentiate between a loss carryback and a loss carryforward. Which can be accounted for with greater certainty when it arises? Why? What are the possible treatments for tax purposes of a net operating loss? What are the circumstances that determine the option to be applied? What is the proper treatment of a net operating loss for financial reporting purposes?