Recognizing a valuation allowance for a deferred tax asset requires that a company:

a. consider all positive and negative information in determining the need for a valuation allowance.
b. consider only the positive information in determining the need for a valuation allowance.
c. take an aggressive approach in its tax planning.
d. pass a recognition threshold, after assuming that it will be audited by taxing authorities.

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

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