Table:
|  | 2019 | 2018 |
| --- | --- | --- |
| Deferred tax assets (liabilities): |  |  |
| NOL carryover | $5,910 | $3,370 |
| R&D carryover | 173 | 173 |
| Other | 236 | 239 |
| Depreciation | 42 | 61 |
|  | 6,361 | 3,843 |
| Less valuation allowance | (6,361) | (3,843) |
| Net deferred tax asset | $- | $- |
Paragraphs:
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the difference between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
At December 31, 2019, the Company had net operating loss carry-forwards of approximately $21.6 million that may be offset against future taxable income indefinitely. No tax benefit has been reported in the 2019 financial statements, since the potential tax benefit is offset by a valuation allowance of the same amount.
Net deferred tax assets consist of the following components as of December 31, 2019 and 2018:
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry-forwards for federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry-forwards may be limited as to use in future years.
Question:
How are deferred tax assets and liabilities adjusted?
Answer: adjusted for the effects of changes in tax laws and rates on the date of enactment