This is from the Intermediate Accounting book 9th edition by authors :Spiceland, Nelson, Thomas. It is E-16-20. If the taxable loss is allowed to be carried forward, then how come it shows a loss in the 2018 income statement? Shouldn't it just reflect in future income statements?

During 2018, its first year of operations, Baginski Steel Corporation reported a net operating loss of $375,000 for financial reporting and tax purposes. The enacted tax rate is 40%. Required: 1. Prepare the journal entry to recognize the income tax benefit of the net operating loss. Assume the weight of available evidence suggests future taxable income sufficient to benefit from future deductible amounts from the net operating loss carryforward. 2. Show the lower portion of the 2018 income statement that reports the income tax benefit of the net operating loss. The lower portion of the year 2018 income statement to report the income tax benefit of the net operating loss is presented by deducting the income tax savings net operating loss from the operating loss before income taxes as shown below: Particulars Amount ($) Operating loss before income taxes (375) Less: Income tax savings net operating loss 150 Net loss 225 Comment