EIX » Topics » Accounting for Uncertainty in Income Taxes

This excerpt taken from the EIX 10-Q filed May 8, 2009.

Accounting for Uncertainty in Income Taxes

The following table provides a reconciliation of unrecognized tax benefits from December 31 to March 31 for 2009 and 2008:

In millions
  2009
  2008
 
   
 
  (Unaudited)
 

Balance at beginning of period

  $ 2,237   $ 2,114  
 

Tax positions taken during the current year

             
   

Increases

    3     78  
   

Decreases

         
 

Tax positions taken during a prior year

             
   

Increases

    8     20  
   

Decreases

    (107 )   (63 )

Decreases for settlements during the period

         

Reductions for lapses of applicable statute of limitations

         
   

Balance at March 31

  $ 2,141   $ 2,149  
   

The unrecognized tax benefits in the table above reflect affirmative claims related to timing differences of $1.5 billion at March 31, 2009 and December 31, 2008, that have been claimed on amended tax returns, but have not met the recognition threshold pursuant to FIN 48 and have been denied by the IRS as part of their examinations. These affirmative claims remain unpaid by the IRS and no receivable has been recorded. These affirmative claims as well as other uncertain tax positions are expected to be settled in the next twelve months with the consummation of the Global Settlement discussed below. As a result, the unrecognized tax benefits will be reduced by approximately $1.4 billion.

As of March 31, 2009 and December 31, 2008, respectively, if recognized, $202 million and $210 million of the unrecognized tax benefits would impact the effective tax rate.

Accrued Interest and Penalties

The total amounts of accrued interest and penalties related to Edison International's income tax reserve were $206 million and $200 million as of March 31, 2009 and December 31, 2008, respectively. For the three months ended March 31, 2009, and 2008, respectively, $4 million and $8 million of after-tax interest expense was recognized and included in income tax expense.

These excerpts taken from the EIX 10-K filed Mar 2, 2009.
Accounting for Uncertainty in Income Taxes
 
FIN 48 requires an enterprise to recognize, in its financial statements, the best estimate of the impact of a tax position by determining if the weight of the available evidence indicates it is more likely than not, based solely on the technical merits, that the position will be sustained on audit. Edison International has filed affirmative tax claims related to tax positions, which, if accepted, could result in refunds of taxes paid or additional tax benefits for positions not reflected on filed original tax returns. FIN 48 requires the disclosure of all unrecognized tax benefits, which includes the reserves recorded for tax positions on filed tax returns and the unrecognized portion of affirmative claims.


146


Table of Contents

 
Notes to Consolidated Financial Statements
 
Accounting for Uncertainty in Income Taxes
 
FIN 48 requires an enterprise to recognize, in its financial statements, the best estimate of the impact of a tax position by determining if the weight of the available evidence indicates it is more likely than not, based solely on the technical merits, that the position will be sustained on audit. Edison International has filed affirmative tax claims related to tax positions, which, if accepted, could result in refunds of taxes paid or additional tax benefits for positions not reflected on filed original tax returns. FIN 48 requires the disclosure of all unrecognized tax benefits, which includes the reserves recorded for tax positions on filed tax returns and the unrecognized portion of affirmative claims.


146


Table of Contents

 
Notes to Consolidated Financial Statements
 
Accounting
for Uncertainty in Income Taxes



 



FIN 48 requires an enterprise to recognize, in its
financial statements, the best estimate of the impact of a tax
position by determining if the weight of the available evidence
indicates it is more likely than not, based solely on the
technical merits, that the position will be sustained on audit.
Edison International has filed affirmative tax claims related to
tax positions, which, if accepted, could result in refunds of
taxes paid or additional tax benefits for positions not
reflected on filed original tax returns. FIN 48 requires
the disclosure of all unrecognized tax benefits, which includes
the reserves recorded for tax positions on filed tax returns and
the unrecognized portion of affirmative claims.





146





Table of Contents





 





Notes to Consolidated Financial Statements

 




Accounting
for Uncertainty in Income Taxes



 



FIN 48 requires an enterprise to recognize, in its
financial statements, the best estimate of the impact of a tax
position by determining if the weight of the available evidence
indicates it is more likely than not, based solely on the
technical merits, that the position will be sustained on audit.
Edison International has filed affirmative tax claims related to
tax positions, which, if accepted, could result in refunds of
taxes paid or additional tax benefits for positions not
reflected on filed original tax returns. FIN 48 requires
the disclosure of all unrecognized tax benefits, which includes
the reserves recorded for tax positions on filed tax returns and
the unrecognized portion of affirmative claims.





146





Table of Contents





 





Notes to Consolidated Financial Statements

 




This excerpt taken from the EIX 10-Q filed Nov 7, 2008.

Accounting for Uncertainty in Income Taxes

FIN 48 requires an enterprise to recognize, in its financial statements, the best estimate of the impact of a tax position by determining if the weight of the available evidence indicates it is more likely than not, based solely on the technical merits, that the position will be sustained on audit. Edison International has filed affirmative tax claims related to tax positions, which, if accepted, could result in refunds of taxes paid or additional tax benefits for positions not reflected on filed original tax returns. FIN 48 requires the disclosure of all unrecognized tax benefits, which includes the reserves recorded for tax positions on filed tax returns and the unrecognized portion of affirmative claims.

Unrecognized Tax Benefits

The following table provides a reconciliation of unrecognized tax benefits from January 1, 2008 to September 30, 2008 and the reasons for such changes:

 

In millions    (Unaudited)  

Balance at January 1, 2008

   $ 2,114  

Tax positions taken during the current year

  

Increases

     75  

Decreases

      

Tax positions taken during a prior year

  

Increases

     105  

Decreases

     (129 )

Decreases for settlements during the period

      

Reductions for lapses of applicable statute of limitations

      
Balance at September 30, 2008    $  2,165  

The unrecognized tax benefits in the table above reflect affirmative claims related to timing differences of $1.5 billion and $1.6 billion at September 30, 2008 and January 1, 2008, respectively, but have not met the recognition threshold pursuant to FIN 48 and have been denied by the IRS as part of their examinations. These affirmative claims remain unpaid by the IRS and no receivable has been recorded. Edison International has vigorously defended these affirmative claims in IRS administrative appeals proceedings and these claims are included in the ongoing Global Settlement negotiations.

It is reasonably possible that Edison International could resolve, as part of the Global Settlement, or otherwise, with the IRS, all or a portion of the unrecognized tax benefits through tax year 2002 within the next 12 months, which could reduce unrecognized tax benefits by up to $1.4 billion.

The total amount of unrecognized tax benefits as of September 30, 2008 and January 1, 2008 that, if recognized, would have an effective tax rate impact is $207 million and $206 million, respectively.

Accrued Interest and Penalties

The total amounts of accrued interest and penalties related to Edison International’s income tax reserve were $193 million and $162 million as of September 30, 2008 and January 1, 2008, respectively. The after-tax interest expense recognized and included in income tax expense was $5 million and $18 million for the three- and nine-month periods ended September 30, 2008, respectively.

 

13


Table of Contents
This excerpt taken from the EIX 10-Q filed Aug 8, 2008.

Accounting for Uncertainty in Income Taxes

FIN 48 requires an enterprise to recognize, in its financial statements, the best estimate of the impact of a tax position by determining if the weight of the available evidence indicates it is more likely than not, based solely on the technical merits, that the position will be sustained on audit. Edison International has filed affirmative tax claims related to tax positions, which, if accepted, could result in refunds of taxes paid or additional tax benefits for positions not reflected on filed original tax returns. FIN 48 requires the disclosure of all unrecognized tax benefits, which includes the reserves recorded for tax positions on filed tax returns and the unrecognized portion of affirmative claims.

Unrecognized Tax Benefits Tabular Disclosure

The following table provides a reconciliation of unrecognized tax benefits from January 1, 2008 to June 30, 2008:

 

In millions    (Unaudited)  

Balance at January 1, 2008

   $ 2,114  

Tax positions taken during the current year

  

Increases

     55  

Decreases

      

Tax positions taken during a prior year

  

Increases

     84  

Decreases

     (97 )

Decreases for settlements during the period

      

Reductions for lapses of applicable statute of limitations

      
Balance at June 30, 2008    $  2,156  

The unrecognized tax benefits in the table above reflects affirmative claims related to timing differences of $1.5 billion and $1.6 billion at June 30, 2008 and January 1, 2008, respectively, but have not met the recognition threshold pursuant to FIN 48 and have been denied by the IRS as part of their examinations. These affirmative claims remain unpaid by the IRS and no receivable has been recorded. Edison International is vigorously defending these affirmative claims in IRS administrative appeals proceedings.

 

12


Table of Contents

It is reasonably possible that Edison International could reach a settlement with the IRS for all or a portion of the unrecognized tax benefits through tax year 2002 within the next 12 months, which could reduce unrecognized tax benefits by up to $1.3 billion.

The total amount of unrecognized tax benefits as of June 30, 2008 and January 1, 2008 that, if recognized, would have an effective tax rate impact is $205 million and $206 million, respectively.

The total amount of accrued interest and penalties were $184 million and $162 million as of June 30, 2008 and January 1, 2008, respectively. The after-tax interest expense recognized and included in income tax expense was $5 million and $13 million for the three- and six-month periods ended June 30, 2008, respectively.

This excerpt taken from the EIX 10-Q filed May 8, 2008.

Accounting for Uncertainty in Income Taxes

Pursuant to the requirements of FIN 48, Edison International records tax reserves for uncertain tax return positions taken or expected to be taken on tax returns. Edison International also has filed affirmative tax claims related to uncertain tax positions, which, if accepted, could result in refunds of taxes paid or additional tax benefits for positions not reflected on filed original tax returns. FIN 48 requires the disclosure of all unrecognized tax benefits, which includes the reserves recorded for uncertain tax positions on filed tax returns and the unrecognized portion of affirmative claims.

 

11


Table of Contents

Unrecognized Tax Benefits Tabular Disclosure

The following table provides a reconciliation of unrecognized tax benefits from January 1, 2008 to March 31, 2008:

 

In millions    (Unaudited)  

Balance at January 1, 2008

   $  2,114  

Tax positions taken during the current year

  

Increases

     78  

Decreases

      

Tax positions taken during a prior year

  

Increases

     20  

Decreases

     (63 )

Decreases for settlements during the period

      

Reductions for lapses of applicable statute of limitations

      

Balance at March 31, 2008

   $ 2,149  

The unrecognized tax benefits in the table above reflects affirmative claims related to timing differences of $1.5 billion and $1.6 billion at March 31, 2008 and January 1, 2008, respectively, but have not met the recognition threshold pursuant to FIN 48 and have been denied by the IRS as part of their examinations. These affirmative claims remain unpaid by the IRS and no receivable has been recorded. Edison International is vigorously defending these affirmative claims in IRS administrative appeals proceedings.

It is reasonably possible that Edison International could reach a settlement with the IRS to all or a portion of the unrecognized tax benefits through tax year 2002 within the next 12 months, which could reduce unrecognized tax benefits by up to $1.2 billion.

The total amount of unrecognized tax benefits as of March 31, 2008 and January 1, 2008 that, if recognized, would have an effective tax rate impact is $203 million and $206 million, respectively.

The total amount of accrued interest and penalties were $176 million and $162 million as of March 31, 2008 and January 1, 2008, respectively. For the three months ended March 31, 2008, $8 million of after-tax interest expense was recognized and included in income tax expense.

These excerpts taken from the EIX 10-K filed Feb 27, 2008.
Accounting for Uncertainty in Income Taxes
 
Pursuant to the requirements of FIN 48, Edison International records tax reserves for uncertain tax return positions reflected on filed tax returns. Edison International also has filed affirmative tax claims for uncertain tax positions, reflecting potential refunds of taxes paid, or additional tax benefits for positions taken on prior tax returns. FIN 48 requires the disclosure of all unrecognized tax benefits, which includes the reserves recorded for uncertain tax positions on filed tax returns and the unrecognized portion of affirmative claims.
 
Accounting
for Uncertainty in Income Taxes



 



Pursuant to the requirements of FIN 48, Edison
International records tax reserves for uncertain tax return
positions reflected on filed tax returns. Edison International
also has filed affirmative tax claims for uncertain tax
positions, reflecting potential refunds of taxes paid, or
additional tax benefits for positions taken on prior tax
returns. FIN 48 requires the disclosure of all unrecognized
tax benefits, which includes the reserves recorded for uncertain
tax positions on filed tax returns and the unrecognized portion
of affirmative claims.


 




Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki