Radian Group Inc. Notes to Consolidated Financial Statements - (Continued) The significant components of our net deferred tax assets and liabilities are summarized as follows:  December 31, (In thousands) 2012 2011 Deferred tax assets: Accrued expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 51,049 $ 41,011 Unearned premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,060 14,327 PDR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,290 1,275 NOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 666,633 666,407 Differences in fair value of derivative and other financial instruments . . . 54,335 — Rescission premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,797 20,015 State NOL carryforward. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,744 31,825 Foreign tax credit carryforward. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,292 26,884 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,478 5,037 Partnership investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,704 64,544 Loss reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,540 — Residual interest in LPV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,084 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,319 57,127 Total deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,072,325 928,452 Deferred tax liabilities: Deferred policy acquisition costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,882 48,969 Convertible debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,449 32,091 Differences in fair value of derivative and other financial instruments . . . — 3,591 Net unrealized gain on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,783 4,191 Loss reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 9,744 Foreign currency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 22 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,536 16,169 Total deferred tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,668 114,777 Valuation allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 989,657 797,700 Net DTA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 15,975  As of December 31, 2012, we recorded a net current income tax payable of approximately  $132.7 million, which  primarily consists of liabilities related to applying the standards of accounting for uncertainty in income taxes and a current  federal income tax recoverable of approximately  $8.1 million. For federal income tax purposes, we have approximately  $1.9  billion of NOL carryforwards and  $26.3 million of foreign tax credit carryforwards as of  December 31, 2012. To the extent not  utilized, the NOL carryforwards will expire during tax years 2028 through 2032 and the foreign tax credit carryforwards will  expire during tax years 2018 through 2020. Certain entities within our consolidated group have also generated DT As of  approximately $31.7 million relating to state and local NOL carryforwards, which if unutilized, will expire during various  future tax periods. During  2011, we recognized approximately $728.0 million of estimated cancellation of indebtedness taxable  income resulting from our partnership interest in C-BASS, which filed for Subchapter 1 1 bankruptcy protection on November  12, 2010 and was formally liquidated pursuant to the Plan of Liquidation that was confirmed on  April 25, 2011. During 2012,  C-BASS amended its 2011 federal tax return and, as a result, our share of cancellation of indebtedness taxable income  decreased to approximately $667.0 million. Such cancellation of indebtedness income was fully of fset by our NOLs. A valuation allowance of approximately  $989.7 million and $797.7 million was recorded against our net DT A of  approximately $989.7 million and $813.7 million at December 31, 2012 and 2011, respectively. The remaining DTA of  approximately $16.0 million at December 31, 2011 represented our NOL carryback, which we expected to utilize as part of an  overall settlement of proposed Internal Revenue Service (”IRS”) adjustments relating to tax years 2000 through 2007. For the  year ended December 31, 2012, our valuation allowance increased by approximately  $192.0 million, of which approximately  $3.7 million of the increase was included in other comprehensive income.  Additionally, approximately $16.0 million of the  2012 increase resulted from recent developments regarding our IRS Of fice of Appeals (”Appeals”) settlement efforts, which  leads us to believe that a settlement with  Appeals is no longer likely, as discussed in more detail below. 242