[cavilatrest]

To add-on to previous commenters, they're usually the result of discrepancies between how taxes are actually charged, and how they're calculated for financial statement purposes.

For example, companies will calculate depreciation on their capital assets using various methods. However the IRS/CRA have their own methods for calculating depreciation on these assets. The difference between these two amounts can create a deferred income tax liability or asset. That is, if you record depreciation higher than what the IRS calculates as, the income tax expense you record on your income statement will be higher than the amount you are actually charged.

There are also rules which identify whether or not companies can put a deferred tax asset on their balance sheet. Under International Accounting Standards (IFRS), companies must establish that they can realize these assets by having sufficient income to apply them against in the future. In the U.S., as was the case here, a valuation allowance was applied to decrease the asset as they indicated that they weren't likely going to have a sufficient net income in future periods to apply that asset to tax expenses.

Anyways I'm a bit rough on it as while I've got an education in accounting it's not my day-to-day job anymore. Additionally I'm not that familiar with U.S. accounting standards