Question

How should we treat deferred taxes in valuation?

Answer 1

"The deferred tax liability that shows up on the financial statements of many firms reflects the fact that firms often use strategies that reduce their taxes in the current year while increasing their taxes in the future years." Damodaran.

You should decide whether to account for them in debt or not.

Answer 2

I think you should either consider it within the Working capital (like any other non interest bearing liability) or when converting operating taxes to cash taxes.