Absent a significant dollar amount of preference items (determined by a set of complex rules), total taxes paid over the entire life of a company will be based on the regular tax system, not the AMT system. This will occur because the primary reason that tax under the AMT system may be due is the existence of temporary differences that ultimately will reverse, such as those caused by accelerated depreciation. In addition, part or all of the AMT paid by a company can be carried forward and credited against regular tax in later years to the extent the regular tax liability exceeds AMT in those years.

Statement 109 requires that the regular tax rate be used to measure deferred tax liabilities and assets even when a company expects to be an AMT taxpayer in the future. However, the fact that a company expects to be an AMT taxpayer indefinitely may affect the company's ability to recognize the entire amount of tax benefits for deductible temporary differences and carryforwards under the regular tax system. Thus, the impact of the AMT system should be considered in evaluating the need for, and amount of, a valuation allowance.