Corp: let me try another approach in trying to explain why IMO reversal of the valuation account has no effect on cash flow.
I am sure you are familiar with the NOL carry back or carry forward in regard to taxes. If you have a loss during a year you can apply it against previous profits and ask for a refund, or apply it against future profit and pay less taxes. I believe the payment of less tax is basically what you are claiming.
Since the NOL may result in the actual payment of less taxes in the future it is considered an asset, and after various gyrations it is reported on the balance sheet as deferred tax assets. However, since at the time it is recorded it is not known whether future profits resulting in a tax liability will be generated, the accounting rule makers have stated that a reserve should be established to reduce the value of the deferred asset. The basic rule being that if it is determined that it is more likely than not that profits will not be generated, the valuation reserve should be established and maintained. Conversely, if it is determined that it is more likely than not (More than 50% chance) that future profits will be generated allowing use of the NOL carry forward to offset future taxes, the reserve can be reduced or eliminated.
As you can see from the above the reduction or elimination of the valuation reserve does not directly affect a tax payment. It is just one of many judgmental decisions made in acounting. It is only when future profits are generated, and taxes are due that the NOL deferred tax asset will be used to offset the tax payment
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