ACOR » Topics » Income Taxes

These excerpts taken from the ACOR 10-K filed Feb 26, 2010.

Income Taxes

        As part of the process of preparing our financial statements we are required to estimate our income taxes in each of the jurisdictions in which we operate. We account for income taxes by the asset and liability method. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end, based on enacted laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

        We did not record any tax provision or benefit for the year ended December 31, 2008. We have provided a valuation allowance for the full amount of our gross deferred tax assets since realization of any future benefit from deductible temporary differences and net operating loss carry-forwards cannot be sufficiently assured at December 31, 2009. As of December 31, 2009, we had available net operating loss carry-forwards of approximately $249.5 million for federal and state income tax purposes, which are available to offset future federal and state taxable income, if any, and expire between 2010 and 2029 and research and development tax credit carry-forwards of approximately $1.6 million for federal income tax reporting purposes which are available to reduce federal income taxes, if any, through 2019. For the year ended December 31, 2009, we incurred $0.2 million for the alternative minimum tax which has been classified in general and administrative expense and utilized $13.5 million of our net operating loss carry forward as a result of the upfront payment from Biogen. Since our inception, we have incurred substantial losses and expect to incur substantial and recurring losses in future periods. The Internal Revenue Code of 1986, as amended, the Code, provides for a limitation of the annual use of net operating loss and research and development tax credit carry-forwards (following certain ownership changes, as defined by the Code) that could significantly limit our ability to utilize these carry-forwards. We have experienced various ownership changes, as defined by the Code, as a result of past financings. Accordingly, our ability to utilize the aforementioned carry-forwards may be limited. Additionally, because U.S. tax laws limit the time during which these carry-forwards may be applied against future taxes we may not be able to take full advantage of these attributes for federal income tax purposes.

(8) Income Taxes

        The Company had available net operating loss carry-forwards (NOL) of approximately $249.5 million and $262.2 million as of December 31, 2009 and 2008 respectively, for federal and state income tax purposes, which are available to offset future federal and state taxable income, if any, and expire between 2010 and 2029. For the year ended December 31, 2009, the Company incurred $0.2 million for the alternative minimum tax which has been classified in general and administrative expense and utilized $13.5 million of its net operating loss carry-forward as a result of the upfront payment from Biogen. The Company also has research and development tax credit carry-forwards of approximately $1.6 million and $1.6 million as of December 31, 2009 and 2008, for federal income tax reporting purposes that are available to reduce federal income taxes, if any, and expire in future years beginning in 2019. The Company is no longer subject to federal, state or foreign income tax audits for tax years prior to 2004.

        The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2009 and 2008 are presented below:

 
  December 31,
2009
  December 31,
2008
 

Net operating loss carry-forwards

  $ 83,828,434   $ 88,829,117  

Research and development tax credit

    1,577,897     1,577,897  

Property and equipment

    430,857     834,527  

Intellectual property

    2,763,200     3,154,808  

Stock options and warrants

    9,160,528     8,155,122  

Deferred revenue

    41,643,521     7,724,122  

Inventory reserve

        167,362  

Revenue interest liability

    4,413,052     6,728,310  

NRI acquisition

    830,938     892,276  

Other temporary differences

    2,551,202     1,390,290  
           

    147,199,629     119,453,831  

Less valuation allowance

    (147,199,629 )   (119,453,831 )
           

Net deferred tax assets

  $   $  
           

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        Changes in the valuation allowance for the years ended December 31, 2009 and 2008 amounted to approximately $27.7 million and $21.6 million, respectively. Since inception, the Company has incurred substantial losses and expects to incur substantial losses in future periods. The Tax Reform Act of 1986 (the Act) provides for a limitation of the annual use of NOL and research and development tax credit carry-forwards (following certain ownership changes, as defined by the Act) that could significantly limit the Company's ability to utilize these carry-forwards. The Company has experienced various ownership changes, as a result of past financings. Accordingly, the Company's ability to utilize the aforementioned carry-forwards may be limited. Additionally, because U.S. tax laws limit the time during which these carry-forwards may be applied against future taxes, the Company may not be able to take full advantage of these attributes for federal income tax purposes. Because of the above mentioned factors, the Company has not recognized its gross deferred tax assets as of and for all periods presented. As of December 31, 2009, management believes that it is more likely than not that the net deferred tax assets will not be realized based on future operations and reversal of deferred tax liabilities. Accordingly, the Company has provided a full valuation allowance against its gross deferred tax assets and no tax benefit has been recognized relative to its pretax losses.

These excerpts taken from the ACOR 10-Q filed May 11, 2009.

(4)    Income Taxes

        The Company had available net operating loss carry-forwards (NOL) of approximately $279.1 million and $262.2 million as of March 31, 2009 and December 31, 2008, respectively, for federal and state income tax purposes, which are available to offset future federal and state taxable income, if any, and expire between 2010 and 2028. The Company also has research and development tax credit carryforwards of approximately $1.6 million as of both March 31, 2009 and December 31, 2008, for federal income tax reporting purposes that are available to reduce federal income taxes, if any, and expire in future years beginning in 2018.

        At March 31, 2009 and December 31, 2008, the Company had a deferred tax asset of $125.6 million and $119.5 million, respectively, offset by a full valuation allowance. Since inception, the

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Income Taxes

        As part of the process of preparing our financial statements we are required to estimate our income taxes in each of the jurisdictions in which we operate. We account for income taxes by the asset and liability method. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end, based on enacted laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

        We have not recorded any tax provision or benefit for the three-month periods ended March 31, 2009 and 2008. We have provided a valuation allowance for the full amount of our gross deferred tax assets since realization of any future benefit from deductible temporary differences and net operating loss carry-forwards cannot be sufficiently assured at March 31, 2009.

        As of March 31, 2009, we had available net operating loss carry-forwards of approximately $279.1 million for federal and state income tax purposes, which are available to offset future federal and state taxable income, if any, and expire between 2010 and 2028 and research and development tax credit carry-forwards of approximately $1.6 million for federal income tax reporting purposes which are available to reduce federal income taxes, if any, through 2018. Since our inception, we have incurred substantial losses and expect to incur substantial and recurring losses in future periods. The Internal Revenue Code of 1986, as amended, the Code, provides for a limitation of the annual use of net operating loss and research and development tax credit carry forwards (following certain ownership changes, as defined by the Code) that could significantly limit our ability to utilize these carry-forwards. We have experienced various ownership changes, as defined by the Code, as a result of past financings. Accordingly, our ability to utilize the aforementioned carry- forwards may be limited. Additionally, because U.S. tax laws limit the time during which these carry forwards may be applied against future taxes we may not be able to take full advantage of these attributes for federal income tax purposes.

These excerpts taken from the ACOR 10-K filed Mar 2, 2009.

Income Taxes

        As part of the process of preparing our financial statements we are required to estimate our income taxes in each of the jurisdictions in which we operate. We account for income taxes by the asset and liability method. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end, based on enacted laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

        We have not recorded any tax provision or benefit for the years ended December 31, 2008 and 2007. We have provided a valuation allowance for the full amount of our gross deferred tax assets since realization of any future benefit from deductible temporary differences and net operating loss carry-forwards cannot be sufficiently assured at December 31, 2008.

        As of December 31, 2008, we had available net operating loss carry-forwards of approximately $262.2 million for federal and state income tax purposes, which are available to offset future federal and state taxable income, if any, and expire between 2010 and 2028 and research and development tax credit carry-forwards of approximately $1.6 million for federal income tax reporting purposes which are available to reduce federal income taxes, if any, through 2018. Since our inception, we have incurred substantial losses and expect to incur substantial and recurring losses in future periods. The Internal Revenue Code of 1986, as amended, the Code, provides for a limitation of the annual use of net operating loss and research and development tax credit carry-forwards (following certain ownership changes, as defined by the Code) that could significantly limit our ability to utilize these carry-forwards. We have experienced various ownership changes, as defined by the Code, as a result of past financings. Accordingly, our ability to utilize the aforementioned carry-forwards may be limited. Additionally, because U.S. tax laws limit the time during which these carry-forwards may be applied against future taxes we may not be able to take full advantage of these attributes for federal income tax purposes.

Income Taxes



        As part of the process of preparing our financial statements we are required to estimate our income taxes in each of the jurisdictions
in which we operate. We account for income taxes by the asset and liability method. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between
the tax bases of assets and liabilities and their financial reporting amounts at each year-end, based on enacted laws and statutory tax rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax
assets will not be realized.



        We
have not recorded any tax provision or benefit for the years ended December 31, 2008 and 2007. We have provided a valuation allowance for the full amount of our gross deferred
tax assets
since realization of any future benefit from deductible temporary differences and net operating loss carry-forwards cannot be sufficiently assured at December 31, 2008.



        As
of December 31, 2008, we had available net operating loss carry-forwards of approximately $262.2 million for federal and state income tax purposes, which are available
to offset future federal and state taxable income, if any, and expire between 2010 and 2028 and research and development tax credit carry-forwards of approximately $1.6 million for federal
income tax reporting purposes which are available to reduce federal income taxes, if any, through 2018. Since our inception, we have incurred substantial losses and expect to incur substantial and
recurring losses in future periods. The Internal Revenue Code of 1986, as amended, the Code, provides for a limitation of the annual use of net operating loss and research and development tax credit
carry-forwards (following certain ownership changes, as defined by the Code) that could significantly limit our ability to utilize these carry-forwards. We have experienced various
ownership changes, as defined by the Code, as a result of past financings. Accordingly, our ability to utilize the aforementioned carry-forwards may be limited. Additionally, because U.S.
tax laws limit the time during which these carry-forwards may be applied against future taxes we may not be able to take full advantage of these attributes for federal income tax purposes.



(9) Income Taxes

        The Company had available net operating loss carry-forwards (NOL) of approximately $262.2 million and $179.9 million as of December 31, 2008 and 2007, for federal and state income tax purposes, which are available to offset future federal and state taxable income, if any, and expire between 2010 and 2028. The Company also has research and development tax credit carryforwards of approximately $1.6 million and $1.4 million as of December 31, 2008 and 2007, for

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federal income tax reporting purposes that are available to reduce federal income taxes, if any, and expire in future years beginning in 2018.

        The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2008 and 2007 are presented below:

 
  December 31,
2008
  December 31,
2007
 

Net operating loss carryforwards

  $ 88,829,117   $ 64,949,570  

Research and development tax credit

    1,577,897     1,406,750  

Property and equipment

    834,527     756,420  

Intellectual property

    3,154,808     3,289,572  

Stock options and warrants

    8,155,122     11,722,929  

Deferred revenue

    7,724,122     7,342,693  

Inventory reserve

    167,362     220,651  

Revenue interest liability

    6,728,310     7,242,903  

NRI acquisition

    892,276      

Other temporary differences

    1,390,290     898,298  
           

    119,453,831     97,829,786  

Less valuation allowance

    (119,453,831 )   (97,829,786 )
           

Net deferred tax assets

  $   $  
           

        Changes in the valuation allowance for the years ended December 31, 2008 and 2007 amounted to approximately $21.6 million and $3.6 million, respectively. Since inception, the Company has incurred substantial losses and expects to incur substantial losses in future periods. The Tax Reform Act of 1986 (the Act) provides for a limitation of the annual use of NOL and research and development tax credit carryforwards (following certain ownership changes, as defined by the Act) that could significantly limit the Company's ability to utilize these carryforwards. The Company has experienced various ownership changes, as a result of past financings. Accordingly, the Company's ability to utilize the aforementioned carryforwards may be limited. Additionally, because U.S. tax laws limit the time during which these carryforwards may be applied against future taxes, the Company may not be able to take full advantage of these attributes for federal income tax purposes. Because of the above mentioned factors, the Company has not recognized its gross deferred tax assets as of and for all periods presented. As of December 31, 2008, management believes that it is more likely than not that the net deferred tax assets will not be realized based on future operations and reversal of deferred tax liabilities. Accordingly, the Company has provided a full valuation allowance against its gross deferred tax assets and no tax benefit has been recognized relative to its pretax losses.

(9) Income Taxes



        The Company had available net operating loss carry-forwards (NOL) of approximately $262.2 million and $179.9 million as
of December 31, 2008 and 2007, for federal and state income tax purposes, which are available to offset future federal and state taxable income, if any, and expire between 2010 and 2028. The
Company also has research and development tax credit carryforwards of approximately $1.6 million and $1.4 million as of December 31, 2008 and 2007, for



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federal
income tax reporting purposes that are available to reduce federal income taxes, if any, and expire in future years beginning in 2018.



        The
tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2008 and 2007 are
presented below:




















































































































































































 
 December 31,

2008
 December 31,

2007
 

Net operating loss carryforwards

 $88,829,117 $64,949,570 

Research and development tax credit

  1,577,897  1,406,750 

Property and equipment

  834,527  756,420 

Intellectual property

  3,154,808  3,289,572 

Stock options and warrants

  8,155,122  11,722,929 

Deferred revenue

  7,724,122  7,342,693 

Inventory reserve

  167,362  220,651 

Revenue interest liability

  6,728,310  7,242,903 

NRI acquisition

  892,276   

Other temporary differences

  1,390,290  898,298 
      

  119,453,831  97,829,786 

Less valuation allowance

  (119,453,831) (97,829,786)
      

Net deferred tax assets

 $ $ 
      




        Changes
in the valuation allowance for the years ended December 31, 2008 and 2007 amounted to approximately $21.6 million and $3.6 million, respectively. Since
inception, the Company has incurred substantial losses and expects to incur substantial losses in future periods. The Tax Reform Act of 1986 (the Act) provides for a limitation of the annual use of
NOL and research and development tax credit carryforwards (following certain ownership changes, as defined by the Act) that could significantly limit the Company's ability to utilize these
carryforwards. The Company has experienced various ownership changes, as a result of past financings. Accordingly, the Company's ability to utilize the aforementioned carryforwards may be limited.
Additionally, because U.S. tax laws limit the time during which these carryforwards may be applied against future taxes, the Company may not be able to take full advantage of these attributes for
federal income tax purposes. Because of the above mentioned factors, the Company has not recognized its gross deferred tax assets as of and for all periods presented. As of December 31, 2008,
management believes that it is more likely than not that the net deferred tax assets will not be realized based on future operations and reversal of deferred tax liabilities. Accordingly, the Company
has provided a full valuation allowance against its gross deferred tax assets and no tax benefit has been recognized relative to its pretax losses.



This excerpt taken from the ACOR 10-Q filed Nov 10, 2008.

Income Taxes

        As part of the process of preparing our financial statements we are required to estimate our income taxes in each of the jurisdictions in which we operate. We account for income taxes by the asset and liability method. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end, based on enacted laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

        We have not recorded any tax provision or benefit for the three and nine-month periods ended September 30, 2008 and 2007. We have provided a valuation allowance for the full amount of our net deferred tax assets since realization of any future benefit from deductible temporary differences and net operating loss carry- forwards cannot be sufficiently assured at September 30, 2008.

        As of September 30, 2008, we had available net operating loss carry-forwards of approximately $244.6 million for federal and state income tax purposes, which are available to offset future federal and state taxable income, if any, and expire between 2010 and 2026 and research and development tax credit carry- forwards of approximately $1.5 million for federal income tax reporting purposes which

24



are available to reduce federal income taxes, if any, through 2018. Since our inception, we have incurred substantial losses and expect to incur substantial and recurring losses in future periods. The Internal Revenue Code of 1986, as amended, the Code, provides for a limitation of the annual use of net operating loss and research and development tax credit carry forwards (following certain ownership changes, as defined by the Code) that could significantly limit our ability to utilize these carry-forwards. We have experienced various ownership changes, as defined by the Code, as a result of past financings. Accordingly, our ability to utilize the aforementioned carry- forwards may be limited. Additionally, because U.S. tax laws limit the time during which these carry forwards may be applied against future taxes we may not be able to take full advantage of these attributes for federal income tax purposes.

This excerpt taken from the ACOR 10-Q filed Aug 5, 2008.

Income Taxes

        As part of the process of preparing our financial statements we are required to estimate our income taxes in each of the jurisdictions in which we operate. We account for income taxes by the asset and liability method. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end, based on enacted laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

        We have not recorded any tax provision or benefit for the three and six-month periods ended June 30, 2008 and 2007. We have provided a valuation allowance for the full amount of our net deferred tax assets since realization of any future benefit from deductible temporary differences and net operating loss carry- forwards cannot be sufficiently assured at June 30, 2008.

        As of June 30, 2008, we had available net operating loss carry-forwards of approximately $215.7 million for federal and state income tax purposes, which are available to offset future federal and state taxable income, if any, and expire between 2010 and 2026 and research and development tax credit carry- forwards of approximately $1.4 million for federal income tax reporting purposes which are available to reduce federal income taxes, if any, through 2018. Since our inception, we have incurred substantial losses and expect to incur substantial and recurring losses in future periods. The Internal Revenue Code of 1986, as amended, the Code, provides for a limitation of the annual use of net operating loss and research and development tax credit carry forwards (following certain ownership changes, as defined by the Code) that could significantly limit our ability to utilize these carry-forwards. We have experienced various ownership changes, as defined by the Code, as a result of past financings. Accordingly, our ability to utilize the aforementioned carry- forwards may be limited. Additionally, because U.S. tax laws limit the time during which these carry forwards may be applied against future taxes we may not be able to take full advantage of these attributes for federal income tax purposes.

This excerpt taken from the ACOR 10-Q filed May 9, 2008.

Income Taxes

        As part of the process of preparing our financial statements we are required to estimate our income taxes in each of the jurisdictions in which we operate. We account for income taxes by the asset and liability method. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end, based on enacted laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

        We have not recorded any tax provision or benefit for the three-month periods ended March 31 2008 and 2007. We have provided a valuation allowance for the full amount of our net deferred tax assets since realization of any future benefit from deductible temporary differences and net operating loss carry-forwards cannot be sufficiently assured at March 31 2008.

        As of March 31 2008, we had available net operating loss carry-forwards of approximately $198.1 million for federal and state income tax purposes, which are available to offset future federal and state taxable income, if any, and expire between 2010 and 2026 and research and development tax credit carry-forwards of approximately $1.4 million for federal income tax reporting purposes which are available to reduce federal income taxes, if any, through 2018. Since our inception, we have incurred substantial losses and expect to incur substantial and recurring losses in future periods. The Internal Revenue Code of 1986, as amended, the Code, provides for a limitation of the annual use of net operating loss and research and development tax credit carry forwards (following certain ownership changes, as defined by the Code) that could significantly limit our ability to utilize these carry-forwards. We have experienced various ownership changes, as defined by the Code, as a result of past financings. Accordingly, our ability to utilize the aforementioned carry-forwards may be limited. Additionally, because U.S. tax laws limit the time during which these carry forwards may be applied against future taxes we may not be able to take full advantage of these attributes for federal income tax purposes.

These excerpts taken from the ACOR 10-K filed Mar 14, 2008.

(9)   Income Taxes

        The Company had available net operating loss carry-forwards (NOL) of approximately $179.9 million and $144.7 million as of December 31, 2007 and 2006, for federal and state income tax purposes, which are available to offset future federal and state taxable income, if any, and expire between 2010 and 2026. The Company also has research and development tax credit carryforwards of approximately $1.4 million and $1.3 million as of December 31, 2007 and 2006, for federal income tax reporting purposes that are available to reduce federal income taxes, if any, and expire in future years beginning in 2018.

        The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2007 and 2006 are presented below:

 
  December 31,
2007

  December 31,
2006

 
Net operating loss carryforwards   $ 64,959,570   $ 58,660,619  
Research and development tax credit     1,406,750     1,293,676  
Property and equipment     756,420     619,779  
Intellectual property     3,289,572     3,948,035  
Stock options and warrants     11,722,929     11,699,172  
Deferred revenue     7,342,693     7,757,639  
Inventory reserve     220,651     277,160  
Revenue interest liability     7,242,903     9,629,271  
Other temporary differences     898,298     342,031  
   
 
 
      97,829,786     94,227,383  
Less valuation allowance     (97,829,786 )   (94,227,383 )
   
 
 
Net deferred tax assets   $   $  
   
 
 

        Changes in the valuation allowance for the years ended December 31, 2007 and 2006 amounted to approximately $3.6 million and $9.8 million, respectively. Since inception, the Company has incurred substantial losses and expects to incur substantial losses in future periods. The Tax Reform Act of 1986 (the Act) provides for a limitation of the annual use of NOL and research and development tax credit carryforwards (following certain ownership changes, as defined by the Act) that could significantly limit the Company's ability to utilize these carryforwards. The Company has experienced various ownership changes, as a result of past financings. Accordingly, the Company's ability to utilize the aforementioned carryforwards may be limited. Additionally, because U.S. tax laws limit the time during which these carryforwards may be applied against future taxes, the Company may not be able to take full advantage of these attributes for federal income tax purposes. Because of the above mentioned factors, the Company has not recognized its net deferred tax assets as of and for all periods presented. As of December 31, 2007, management believes that it is more likely than not that the net deferred tax assets will not be realized based on future operations and reversal of deferred tax liabilities. Accordingly, the Company has provided a full valuation allowance against its net deferred tax assets and no tax benefit has been recognized relative to its pretax losses.

(9)   Income Taxes



        The Company had available net operating loss carry-forwards (NOL) of approximately $179.9 million and $144.7 million as of December 31, 2007
and 2006, for federal and state income tax purposes, which are available to offset future federal and state taxable income, if any, and expire between 2010 and 2026. The Company also has research and
development tax credit carryforwards of approximately $1.4 million and $1.3 million as of December 31, 2007 and 2006, for federal income tax reporting purposes that are available
to reduce federal income taxes, if any, and expire in future years beginning in 2018.



        The
tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2007 and 2006 are
presented below:





























































































































































 
 December 31,

2007

 December 31,

2006

 
Net operating loss carryforwards $64,959,570 $58,660,619 
Research and development tax credit  1,406,750  1,293,676 
Property and equipment  756,420  619,779 
Intellectual property  3,289,572  3,948,035 
Stock options and warrants  11,722,929  11,699,172 
Deferred revenue  7,342,693  7,757,639 
Inventory reserve  220,651  277,160 
Revenue interest liability  7,242,903  9,629,271 
Other temporary differences  898,298  342,031 
  
 
 
   97,829,786  94,227,383 
Less valuation allowance  (97,829,786) (94,227,383)
  
 
 
Net deferred tax assets $ $ 
  
 
 




        Changes
in the valuation allowance for the years ended December 31, 2007 and 2006 amounted to approximately $3.6 million and $9.8 million, respectively. Since
inception, the Company has incurred substantial losses and expects to incur substantial losses in future periods. The Tax Reform Act of 1986 (the Act) provides for a limitation of the annual use of
NOL and research and development tax credit carryforwards (following certain ownership changes, as defined by the Act) that could significantly limit the Company's ability to utilize these
carryforwards. The Company has experienced various ownership changes, as a result of past financings. Accordingly, the Company's ability to utilize the aforementioned carryforwards may be limited.
Additionally, because U.S. tax laws limit the time during which these carryforwards may be applied against future taxes, the Company may not be able to take full advantage of these attributes for
federal income tax purposes. Because of the above mentioned factors, the Company has not recognized its net deferred tax assets as of and for all periods presented. As of December 31, 2007,
management believes that it is more likely than not that the net deferred tax assets will not be realized based on future operations and reversal of deferred tax liabilities. Accordingly, the Company
has provided a full valuation allowance against its net deferred tax assets and no tax benefit has been recognized relative to its pretax losses.



This excerpt taken from the ACOR 10-Q filed Nov 8, 2007.

Income Taxes

        As part of the process of preparing our financial statements we are required to estimate our income taxes in each of the jurisdictions in which we operate. We account for income taxes by the asset and liability method. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end, based on enacted laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

        We have not recorded any tax provision or benefit for the three or nine-month periods ended September 30, 2007 and 2006. We have provided a valuation allowance for the full amount of our net deferred tax assets since realization of any future benefit from deductible temporary differences and net operating loss carry-forwards cannot be sufficiently assured at September 30, 2007.

        As of September 30, 2007, we had available net operating loss carry-forwards of approximately $169.6 million for federal and state income tax purposes, which are available to offset future federal and state taxable income, if any, and expire between 2010 and 2026 and research and development tax credit carry-forwards of approximately $1.4 million for federal income tax reporting purposes which are available to reduce federal income taxes, if any, through 2018. Since our inception, we have incurred substantial losses and expect to incur substantial and recurring losses in future periods. The Internal Revenue Code of 1986, as amended, the Code, provides for a limitation of the annual use of net operating loss and research and development tax credit carry forwards (following certain ownership changes, as defined by the Code) that could significantly limit our ability to utilize these carry-forwards. We have experienced various ownership changes, as defined by the Code, as a result of past financings. Accordingly, our ability to utilize the aforementioned carry-forwards may be limited. Additionally, because U.S. tax laws limit the time during which these carry forwards may be applied against future taxes we may not be able to take full advantage of these attributes for federal income tax purposes.

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