OKE » Topics » Income Taxes

These excerpts taken from the OKE 10-K filed Feb 25, 2009.
Income Taxes - Income taxes are accounted for using the provisions of Statement 109, “Accounting for Income Taxes.”  Deferred income taxes are provided for the difference between the financial statement and income tax basis of assets and liabilities and carry forward items, based on income tax laws and rates existing at the time the temporary differences are expected to reverse.  The effect on deferred taxes of a change in tax rates is deferred and amortized for operations regulated by the OCC, KCC, RRC and various municipalities in Texas.  For all other operations, the effect is recognized in income in the period that includes the enactment date.  We continue to amortize previously deferred investment tax credits for ratemaking purposes over the period prescribed by the OCC, KCC, RRC and various municipalities in Texas.

In June 2006, the FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109,” which was effective for our year beginning January 1, 2007.  This interpretation was issued to clarify the accounting for uncertainty in income taxes recognized in the financial statements by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  FIN 48 requires the recognition of penalties and interest on any unrecognized tax benefits.  Our policy is to
 
 
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reflect penalties and interest as part of income tax expense as they become applicable.  The adoption of FIN 48 had an immaterial impact on our consolidated financial statements, and the impact for 2008 and 2007 was not material.

We file numerous consolidated and separate income tax returns in the United States federal jurisdiction and in many state jurisdictions.  We also file returns in Canada.  No extensions of statute of limitations have been requested or granted.  Our 2007 and 2006 United States federal income tax returns are currently under audit.

Income Taxes - Income taxes
are accounted for using the provisions of Statement 109, “Accounting for Income
Taxes.”  Deferred income taxes are provided for the difference between
the financial statement and income tax basis of assets and liabilities and carry
forward items, based on income tax laws and rates existing at the time the
temporary differences are expected to reverse.  The effect on deferred
taxes of a change in tax rates is deferred and amortized for operations
regulated by the OCC, KCC, RRC and various municipalities in
Texas.  For all other operations, the effect is recognized in income
in the period that includes the enactment date.  We continue to
amortize previously deferred investment tax credits for ratemaking purposes over
the period prescribed by the OCC, KCC, RRC and various municipalities in
Texas.



In June
2006, the FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes - An
Interpretation of FASB Statement No. 109,” which was effective for our year
beginning January 1, 2007.  This interpretation was issued to clarify
the accounting for uncertainty in income taxes recognized in the financial
statements by prescribing a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return.  FIN 48 requires the recognition
of penalties and interest on any unrecognized tax benefits.  Our
policy is to

 



 



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- -








 

reflect
penalties and interest as part of income tax expense as they become
applicable.  The adoption of FIN 48 had an immaterial impact on our
consolidated financial statements, and the impact for 2008 and 2007 was not
material.



We file
numerous consolidated and separate income tax returns in the United States
federal jurisdiction and in many state jurisdictions.  We also file
returns in Canada.  No extensions of statute of limitations have been
requested or granted.  Our 2007 and 2006 United States federal income
tax returns are currently under audit.



EXCERPTS ON THIS PAGE:

10-K (2 sections)
Feb 25, 2009
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