1.Examine the impact of FIN 48 (Accounting for the Uncertainty in Income Taxes) on GAAP reporting. Identify the benefits of the requirements on financial reporting. Assess whether FIN 48 was necessary and support your position.2.Referencing Case C18-5 from your readings this week, explain why deferred tax assets and liabilities are recognized and reported on a corporation’s balance sheet. Include a discussion of valuation allowance.Case C18-5: Deferred Tax Assets and Liabilities A friend says to you, “I don’t understand how tax- able temporary differences can be ‘liabilities’ and how deductible temporary differences can be ‘assets.’ It seems to me that these temporary dif- ferences relate only to the future and that account- ing is based on ‘historical cost.’ In addition, the government frequently changes the tax laws, so no one knows what the future tax laws will be.” Required: Prepare a written response for your friend that explains why deferred tax assets and deferred tax liabilities are recognized and reported on a corpo- ration’s balance sheet. Include a discussion of a valuation allowance.