Six Flags Entertainment Corp. operates regional theme, water and zoological parks, currently owning and operating 18 parks worldwide. The total amount of net loss carryforward was $249 million started in a previous year. In the year 2012 the net operating loss was improperly accounted for, which caused income tax expense and the deferred tax asset to be incorrectly reported. The allocation of the reversal of the valuation allowance was allocated to other comprehensive income instead of income tax expense benefit. Additionally the foreign earnings timing difference should have continued to be fully reserved through the valuation allowance.

Issues

1. How should Six Flags Entertainment Corp have accounted for a Net Loss Carryforward valuation allowance?
2. How should Six Flags Entertainment Corp have accounted for the allocation of income tax expense?
3. How should Six Flags Entertainment Corp have accounted for the allocation of a deferred tax asset?