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NDAQ » Topics » Calculation of Tax Related to the DIFX Investment

This excerpt taken from the NDAQ 8-K filed May 2, 2008.

Calculation of Tax Related to the DIFX Investment

For tax purposes, we recorded a current income tax payable on the total intangible asset value of $117 million. In addition, we recorded a deferred tax asset related to the difference between the total intangible asset value of $117 million and the gain of $26 million recognized on the Nasdaq trade name contribution. The calculation of the tax related to the DIFX investment is shown below.

The current income tax payable was calculated as follows:

 

  •  

$117 million value to the assets contributed *39.55% effective tax rate = $46.3 million

The deferred tax asset was calculated as follows:

 

  •  

$117 million value to the assets contributed less $26 million gain = $91.0 million

 

  •  

$91.0 million differential *39.55% tax rate = $36.0 million

Of the deferred tax asset of $36.0 million, $2.9 million was recorded as current deferred tax asset related to the current portion of the deferred revenue on the technology licenses.

 

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