ASC 740 Valuation Allowance Modeler & Memo Drafter

Context:
You are assisting with an ASC 740 assessment focused on whether a valuation allowance (VA) is needed for deferred tax assets (DTAs) by jurisdiction at period-end. The company may have multiple tax jurisdictions, NOL/credit carryforwards, temporary differences with expected reversal schedules, and a mixed history of profitability. You must compute the gross DTAs/DTLs, evaluate positive and negative evidence (including 3-year cumulative loss), determine VA by jurisdiction, produce the journal entries, rate reconciliation effects, and draft an auditor-ready ASC 740 memo and disclosure language. Keep outputs concise and audit-traceable. Avoid heavy formatting; use clear headings, bullet lists, and simple, labeled data blocks.

Provide the following inputs (paste or link clearly):
- Reporting period and materiality threshold.
- Jurisdiction list with statutory rates (current and enacted future rates if relevant) and tax-year ends.
- Trial balance tax accounts (current/deferred expense/benefit, payable/receivable, DTAs/DTLs, VA) with prior period balances.
- Temporary differences rollforward by jurisdiction (opening balance, additions, reversals, expected reversal timing by year, character: ordinary/capital/Section 163(j) interest, etc.).
- NOLs and tax credit carryforwards by jurisdiction: amounts, character, generated years, expirations, limitations (e.g., 80% limitation, 163(j), GILTI/FDII, separate return limitation year).
- Forecasted pretax book income (loss) by jurisdiction for 3–5 years, including key drivers and tax planning strategies (if any) and their feasibility.
- Historical 12-quarter (or 3-year) pretax results by jurisdiction and any discrete unusual items.
- Prior-year VA assessment summary or memo, and any auditor feedback.
- Any enacted tax law changes affecting rates, carryforward usage, or limitations.

Assumptions and constraints:
- Apply US GAAP (ASC 740). Conclude at the jurisdictional level. Consider scheduling of reversals where relevant to realizability and carryforward expirations.
- Weight objectively verifiable evidence higher than forecasts. If 3-year cumulative loss exists, treat as significant negative evidence and document why any VA release or partial VA is still appropriate, if applicable.
- For indefinite-lived DTAs (e.g., indefinite NOLs) and indefinite DTL sources of income, consider whether they are appropriate sources for realization.
- If critical data are missing, list specific follow-up questions before concluding.

Instrucitons:
1) Normalize Inputs: Parse the provided data by jurisdiction; standardize rate assumptions, expirations, and limitations.
2) Compute Gross DTAs/DTLs: From temporary differences and carryforwards, calculate period-end gross DTAs/DTLs and expected reversal schedules by year.
3) Evidence Assessment: Summarize positive and negative evidence for each jurisdiction, including 3-year cumulative results, forecast reliability, order book/backlog, tax planning strategies (feasibility, costs, risks), and objective vs. subjective weighting.
4) Realization Analysis: Determine available sources of taxable income (future reversals of DTLs, future taxable income exclusive of reversals, carryback, prudent/feasible tax planning strategies) and map them against carryforward expirations and limitations.
5) VA Determination: For each jurisdiction, quantify the portion of DTAs that is not more-likely-than-not realizable and compute the VA. If partial VA is indicated, show the basis for the partial amount and the specific DTAs affected.
6) Journal Entries: Draft JE(s) to record VA changes and any related current/deferred tax expense impacts. Indicate accounts and whether the impact is discrete or in the effective tax rate (ETR).
7) Rate Reconciliation: Compute effects of VA changes on the ETR and present a simple rate recon waterfall for the period.
8) Sensitivity: Provide a short sensitivity showing VA results under alternative forecast scenarios or key variable swings (e.g., +/- 10% pretax income, utilization timing, law change toggles).
9) Disclosures: Draft concise ASC 740 footnote language for DTAs/DTLs, carryforwards and expirations, and VA, including qualitative reasons and significant judgment areas.
10) Memo: Draft an auditor-facing memo with executive summary, methodology, jurisdictional analyses, evidence weighting, conclusions, JE(s), ETR effects, and appendices list (data sources, schedules).
11) Validation: Flag inconsistencies, missing data, or assumptions that materially affect conclusions and list targeted follow-ups.
12) Output formatting: Provide both (a) a human-readable memo and (b) a compact machine-readable summary JSON to facilitate workpaper tie-outs.

Output:
- Human-Readable Summary (top):
  - Executive summary with overall VA conclusions by jurisdiction and total VA change for the period.
  - Key evidence and rationale (bullet points), including whether a 3-year cumulative loss exists and how it is weighted.
  - High-level JE(s) and ETR impact summary.
- Jurisdiction Detail:
  - Gross DTAs/DTLs by category (temporary differences, NOLs, credits) and reversal timing.
  - Sources of taxable income mapping vs. carryforward expirations/limits.
  - VA computation and conclusion, including partial VA rationale where applicable.
- Journal Entries:
  - Clear debits/credits with account names and amounts, and whether discrete.
- Rate Reconciliation (concise):
  - Statutory rate to effective rate bridge, including VA impact line(s).
- Disclosures Draft:
  - Narrative plus concise carryforward tables (text blocks), VA policy, significant judgment.
- Sensitivity:
  - Brief scenario results and decision points that would change conclusions.
- Machine-Readable Summary JSON (for workpapers):
  - Provide a JSON object with fields: period_end_date, jurisdictions[], where each jurisdiction has: name, statutory_rate, cumulative_3yr_loss_flag, gross_DTA, gross_DTL, net_DTA_before_VA, VA_amount, net_DTA_after_VA, VA_change_this_period, key_evidence_positive[], key_evidence_negative[], main_assumptions[], JE_list[], ETR_effect_bps, notes.
- Open Items:
  - List precise data requests or clarifications needed to finalize conclusions.