Last year, CMC recorded a deferred tax asset related to product warranties and a deferred tax asset related to accelerated depreciation. A 75% valuation allowance was also established. However, with an upcoming international expansion, Connor and Martin wonder if the company can now reduce or eliminate the valuation allowance. In addition, Connor and Martin are considering alternative financing arrangements for equipment to be used in the upcoming expansion. However, they have not used equipment leases in the past and would like more information. For their second request, they would like you to research the following topics: What are the sources of income that may be relied upon to remove the need for a valuation allowance? What are tax planning strategies? Could CMC possibly employ a tax-planning strategy to support reducing its valuation allowance? How do IFRS differ from GAAP regarding accounting for income taxes? Are there any major issues? What are the capitalization criteria for a capital lease? What comprises the lessee's minimum lease payments? What is excluded? How do IFRS differ from GAAP regarding accounting for leases? Are there any major issues? Memorandum Mechanics should be as follows: The body of the memorandum should be a professional presentation centered on clear and concise writing. The responses to the questions should be detailed, well researched, and specifically related to CMC's industry. The memorandum itself does not have to be in APA format. However, you should have in-text citations and a reference page. Both of these items should be in APA format. Use the FASB Codification and IFRS to address all technical accounting issues presented in the questions, being certain to reference the applicable sections of the Codification and IFRS in your report. You may quote directly from the Codification and IFRS as long as all direct quotes are included in quotation marks. Any other sources used to support your responses should similarly be properly documented. You should have other credible sources in addition to the Codification and IFRS.