NOL
NOL Carryforward
Short definition
An NOL carry-forward deducts prior tax losses from future taxable income. It is an asset that defers cash tax; time, transfer and merger rules restrict use.
Detailed explanation
Booking a DTA depends on probable use. Share changes and mergers can restrict the NOL (change-of-control-type rules vary by country).
In valuation the NOL is the PV of cash tax saved, not the book DTA. If the tax base does not arrive before expiry, the asset burns.
Why it matters for the CFO
In an acquisition the NOL changes price and the shield; the SPA writes tax warranties and restrictions separately.
How to read it
The carry-forward pulls T down temporarily; it is not sustainable ETR. Ordering and inflation change real cash.
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Definitions are educational. They are not investment, credit or tax advice.