Valuation allowance
Response to the following problem:
VeriFone Systems is a provider of electronic card payment terminals, peripherals, network products, and software. In its 2013 annual report, the company reported current and long-term deferred tax assets totaling about $513 million. The company also reported valuation allowances totaling about $418 million. What would motivate VeriFone to have a valuation allowance almost equal to its deferred tax assets?