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This excerpt taken from the ASML 20-F filed Jan 29, 2010. Income
taxes
The asset and liability method is used in accounting for income
taxes. Under this method, deferred tax assets and liabilities
are recognized for the tax effect of incurred net operating
losses and for tax consequences attributable to differences
between the balance sheet carrying amounts of existing assets
and liabilities and their respective tax bases. If it is more
likely than not that the carrying amounts of deferred tax assets
will not be realized, a valuation allowance is recorded to
reduce the carrying amounts of those assets.
Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of
a change in tax rates is recognized in the consolidated
statements of operations in the period that includes the
enactment date.
On January 1, 2007 the Company adopted the provisions of
FIN 48 “Accounting for Uncertainty in Income
Taxes” after codification included in ASC 740. ASC 740
clarifies the accounting for income taxes by prescribing a
minimum recognition threshold a tax position is required to meet
before being recognized in the financial statements. ASC 740
also provides guidance on derecognition, measurement,
classification, interest and penalties, accounting in interim
periods, disclosure and transition.
This excerpt taken from the ASML 6-K filed Jul 24, 2009. 15. Income
Taxes
Income tax expense is recognized based on management’s best
estimate of the annual income tax rate expected for the full
financial year. The estimated weighted average annual tax rate
for the six-month period ended June 28, 2009 is
15.7 percent compared to 6.3 percent for the six-month
period ended June 29, 2008.
The effective tax rate for the six-month period ended
June 29, 2008 was impacted by three one-off items on which
we reached agreement with the tax authorities during that
period. These items were the treatment of taxable income related
to ASML’s patent portfolio (application of the
“Royalty Box”) in 2007 and 2008, the valuation of
intellectual property rights acquired in the past against
historical exchange rates, and the treatment of taxable income
related to a temporarily depreciated investment in ASML’s
United States subsidiary, all of which had a favorable impact on
the effective tax rate in the six-month period ended
June 29, 2008. As a result of these three items,
ASML recognized exceptional tax income during 2008 of
approximately EUR 70 million, or approximately
15 percent.
During 2009, ASML has the option to abstain from using the
Royalty Box. This choice will be dependent on the total net
benefits of the Royalty Box over the years
2007-2009.
In case ASML does not make use of the Royalty Box, ASML will
have to reverse related benefits recognized in earlier years.
These prior years’ tax benefits have been adequately
provided for, which will impact the tax rate during 2009 with
approximately EUR 40 million or approximately
13 percent. It is ASML’s expectation that during the
second half of 2009 sufficient clarity will be achieved to take
a final position on this matter.
Current tax assets have decreased as a result of refunds of
taxes paid by tax authorities. Long-term deferred tax assets
have increased as a result of the current loss situation of the
Company in certain tax jurisdictions, as these losses are
expected to be offset by future profits.
This excerpt taken from the ASML 20-F filed Jan 26, 2009. Income
taxes
The asset and liability method is used in accounting for income
taxes. Under this method, deferred tax assets and liabilities
are recognized for the tax effect of incurred net operating
losses and for tax consequences attributable to differences
between the balance sheet carrying amounts of existing assets
and liabilities and their respective tax bases. If it is more
likely than not that the carrying amounts of deferred tax assets
will not be realized, a valuation allowance is recorded to
reduce the carrying amounts of those assets.
ASML ANNUAL REPORT 2008
F-11
Table of Contents
Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of
a change in tax rates is recognized in the consolidated
statements of operations in the period that includes the
enactment date.
On January 1, 2007 we adopted FASB Interpretation
No. 48, “Accounting for Uncertainty in Income
Taxes – an Interpretation of FASB No. 109”
(FIN 48). FIN 48 clarifies the accounting for income
taxes by prescribing a minimum recognition threshold a tax
position is required to meet before being recognized in the
financial statements. FIN 48 also provides guidance on
derecognition, measurement, classification, interest and
penalties, accounting in interim periods, disclosure and
transition.
This excerpt taken from the ASML 20-F filed Jan 25, 2008. Income
taxes
The asset and liability method is used in accounting for income
taxes. Under this method, deferred tax assets and liabilities
are recognized for the tax effect of incurred net operating
losses and for tax consequences attributable to differences
between the balance sheet carrying amounts of existing assets
and liabilities and their respective tax bases. If it was more
likely than not that the carrying amounts of deferred tax assets
would not be realized, a valuation allowance was recorded to
reduce the carrying amounts of those assets.
Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of
a change in tax rates is recognized in the results of operations
in the period that includes the enactment date.
On January 1, 2007 we adopted FASB Interpretation
No. 48, “Accounting for Uncertainty in Income Taxes
– an Interpretation of FASB No. 109”
(FIN 48). FIN 48 clarifies the accounting for income
taxes by prescribing a minimum recognition threshold a tax
position is required to meet before being recognized in the
financial statements. FIN 48 also provides guidance on
derecognition, measurement, classification, interest and
penalties, accounting in interim periods, disclosure and
transition.
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