# Valuation allowance

> Valuation allowance — The reduction of a deferred tax asset to the amount more likely than not (over 50%) to be realized.

Source: https://lopifi.com/glossary/valuation-allowance
Part of: Lopifi — US GAAP books on autopilot, reviewed by a CPA (https://lopifi.com)

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**What is valuation allowance?** In accounting, valuation allowance means the reduction of a deferred tax asset to the amount more likely than not (over 50%) to be realized.

## Words this system refuses for it

- reserve

- **Category:** Tax
- **Specified in:** [Lexicon](https://lopifi.com/md/docs/domain/11-lexicon)
- **Related:** deferred-tax-asset, asset