Defend the position of no allocation of income taxes:
There are many valid arguments for firms that might wish to completely eliminate the allocation of income in the period in which it is earned. Many believe it is “complex, costly, irrelevant, and inconsistent with the conceptual framework” (Chaney & Jeter, 1989, p. 7). And for many firms that practice efficient methods of reducing income taxes, such as growing investments in fixed assets, large portions of the fixed asset liabilities will never result in cash outflows (Wong, Wong, & Naiker, 2011, p. 1088). Furthermore, future cash flows are normally reduced to their present value, but both comprehensive and partial allocation of income taxes do not use present values (Chaney & Jeter, 1989, p. 6). Despite these concerns and objections, it cannot be denied that expecting future payments to be avoided would be against conservatism.
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