True and False

$"1.$ Under the loss carryback approach, companies must apply a current year loss to the most"

recent year first and then to an earlier year.

$2.$ The tax effect of a loss carryforward represents future tax savings and results in the

recognition of a deferred tax asset.

$3.$ Recognizing a valuation allowance for a deferred tax asset requires that a company

consider all positive and negative information in determining the need for a valuation allowance.

$4.$ A possible source of taxable income that may be available to realize a tax benefit

for loss carryforwards is future reversals of existing taxable temporary differences.