Both IFRS and U.S.GAAP require that a valuation allowance when it is deemed more likely than not (greater than 50% likelihood)that the deferred tax asset will not be realized.

Under U.S. GAAP, a valuation allowance is required when it is more likely than not (greater than 50% likelihood) that some portion or all of the deferred tax asset will not be realized. However, IFRS does not use a valuation allowance in the same way; instead, the carrying amount of a deferred tax asset is reduced to the extent that it is no longer probable (i.e., more likely than not) that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized.