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No. of Recommendations: 1
I've been looking at some companies that have posted very large increases in Deferred Tax Assets that have resulted from newly created NOLs, themselves the product of new practices of expensing stock options in the past couple of years. While I understand the mechanics and the GAAP involved, I'm concerned that the very large increase in Investment in DTA is biasing the income tax charges way upward for both Defensive Earnings and Enterprising Earnings relative to the Accrual Earnings. Ultimately showing much lower Def. and Ent. relative to Accr. and perhaps making a seemingly "good" company look worse than it is. Thoughts?

Jeff
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