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These excerpts taken from the ARP 10-K filed Feb 27, 2008. Income
Taxes
The Company accounts for income taxes under an asset and
liability approach. The objective is to recognize the amount of
taxes payable or refundable for the current year and deferred
tax liabilities and assets for the future tax consequences of
events that have been recognized in the Company’s financial
statements or tax returns. Deferred tax liabilities or assets
reflect temporary differences between the amounts of assets and
liabilities for financial and tax reporting purposes. Such
amounts are adjusted, as appropriate, to reflect changes in tax
rates expected to be in effect when the temporary differences
reverse. Additionally, the Company assesses the likelihood that
its deferred tax assets will be recovered from future taxable
income and to the extent the Company believes that recovery is
not likely, the Company establishes a valuation allowance. As of
December 31, 2007, the Company believes that all its
deferred tax assets are recoverable.
The Company calculates current and deferred tax provisions based
on estimates and assumptions that could differ from the actual
results reflected in income tax returns filed during the
following year. Adjustments based on filed income tax returns
are recorded when identified in the subsequent year. The
Company’s effective income tax rate differs from the
statutory tax rate primarily due to state income taxes, the
Domestic Production Activities Deduction, and nondeductible
items. The amount of income taxes the Company pays is subject to
audits by federal, state and foreign tax authorities. The
Company’s estimate of the potential outcome of any
uncertain tax issue is subject to management’s assessment
of relevant risks, facts and circumstances existing at that
time. The Company believes that it has adequately provided for
reasonably foreseeable outcomes related to these matters.
Income tax benefits credited to stockholders’ equity are
primarily related to employee exercises of non-qualified stock
options.
Income Taxes The Company accounts for income taxes under an asset and liability approach. The objective is to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Deferred tax liabilities or assets reflect temporary differences between the amounts of assets and liabilities for financial and tax reporting purposes. Such amounts are adjusted, as appropriate, to reflect changes in tax rates expected to be in effect when the temporary differences reverse. Additionally, the Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and to the extent the Company believes that recovery is not likely, the Company establishes a valuation allowance. As of December 31, 2007, the Company believes that all its deferred tax assets are recoverable. The Company calculates current and deferred tax provisions based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed during the following year. Adjustments based on filed income tax returns are recorded when identified in the subsequent year. The Company’s effective income tax rate differs from the statutory tax rate primarily due to state income taxes, the Domestic Production Activities Deduction, and nondeductible items. The amount of income taxes the Company pays is subject to audits by federal, state and foreign tax authorities. The Company’s estimate of the potential outcome of any uncertain tax issue is subject to management’s assessment of relevant risks, facts and circumstances existing at that time. The Company believes that it has adequately provided for reasonably foreseeable outcomes related to these matters. Income tax benefits credited to stockholders’ equity are primarily related to employee exercises of non-qualified stock options. This excerpt taken from the ARP 10-K filed Mar 1, 2007. Income
Taxes
We account for income taxes under an asset and liability
approach. The objective is to recognize the amount of taxes
payable or refundable for the current year and deferred tax
liabilities and assets for the future tax consequences of events
that have been recognized in the company’s financial
statements or tax returns. Deferred tax liabilities or
Table of Contents
AMERICAN
REPROGRAPHICS COMPANY AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
assets reflect temporary differences between the amounts of
assets and liabilities for financial and tax reporting purposes.
Such amounts are adjusted, as appropriate, to reflect changes in
tax rates expected to be in effect when the temporary
differences reverse. Additionally, we assess the likelihood that
our deferred tax assets will be recovered from future taxable
income and to the extent we believe that recovery is not likely,
we establish a valuation allowance. As of December 31,
2006, we believe that all our deferred tax assets are
recoverable.
We calculate current and deferred tax provisions based on
estimates and assumptions that could differ from the actual
results reflected in income tax returns filed during the
following year. Adjustments based on filed income tax returns
are recorded when identified in the subsequent year. Our
effective income tax rate differs from the statutory tax rate
primarily due to state income taxes and nondeductible items. The
amount of income taxes we pay is subject to audits by federal,
state and foreign tax authorities. Our estimate of the potential
outcome of any uncertain tax issue is subject to
management’s assessment of relevant risks, facts and
circumstances existing at that time. We believe that we have
adequately provided for reasonably foreseeable outcomes related
to these matters.
Income tax benefits credited to stockholders’ equity are
primarily related to employee exercises of non-qualified stock
options.
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