Why Sony’s £4 billion loss isn’t the disaster it seems

[20happyballs]

NoCtiS_NoX said:

20happyballs said:

You people don't understand. It is bad. Read this.

Well them having deferred tax assets in the first place means that they've been doing bad. A deferred tax asset is created when a company operates at a loss, meaning their taxable income is negative. So instead of them having to pay taxes, the government gives them tax credit. Deferred tax assets help companies somewhat recover even though they've suffered a horrible year. I don't know how you could lose deferred tax assets but all I know is that Sony went from doing bad to doing really bad. It is still a 4 billion dollar loss. The good news however, is that this is just a one time loss. Not a plunge in Sony's sales.

But no one is saying it is good. It's still bad.

The OP is saying that the loss isn't as bad as it sounds. I'm just saying that it is as bad as it sounds, and then some. Sony lost those tax assets because they've accumulated too much. The government doesn't need to give companies tax assets, but they do it anyways because the collapse of big corporations like Sony would adversely affect the economy.