PFWD » Topics » Accounting for Income Taxes.

This excerpt taken from the PFWD 10-Q filed May 8, 2009.
Accounting for Income Taxes.   We are subject to income taxes in both the United States and foreign jurisdictions, and we use estimates in determining our provision for income taxes.  We account for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes, which is the asset and liability method for accounting and reporting for income taxes.  We adopted the provisions of FASB Interpretation No., or FIN, 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109 on January 1, 2007.  Under SFAS No. 109, deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and income tax bases of assets and liabilities using statutory rates. This process requires that we project our current tax liability and estimate our deferred tax assets and liabilities, including net operating loss and tax credit carryforwards. In assessing the need for a valuation allowance, we have considered our recent operating results, future taxable income projections and all prudent and feasible tax planning strategies.

 

This excerpt taken from the PFWD 10-Q filed Nov 10, 2008.
Accounting for Income Taxes.    We are subject to income taxes in both the United States and foreign jurisdictions, and we use estimates in determining our provision for income taxes.  We account for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes, which is the asset and liability method for accounting and reporting for income taxes.  We adopted the provisions of FASB Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109, on January 1, 2007.  Under SFAS No. 109, deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and income tax bases of assets and liabilities using statutory rates. This process requires that we project our current tax liability and estimate our deferred tax assets and liabilities, including net operating loss and tax credit carryforwards. In assessing the need for a valuation allowance, we have considered our recent operating results, future taxable income projections and all prudent and feasible tax planning strategies. In 2007, we determined that it was more likely than not that we would realize the full value of our deferred tax assets and eliminated the remaining balance of our valuation allowance.

 

This excerpt taken from the PFWD 10-Q filed Aug 8, 2008.
Accounting for Income Taxes.    We are subject to income taxes in both the United States and foreign jurisdictions, and we use estimates in determining our provision for income taxes.  We account for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes, which is the asset and liability method for accounting and reporting for income taxes.  We adopted the provisions of FASB Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109, on January 1, 2007.  Under SFAS No. 109, deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and income tax bases of assets and liabilities using statutory rates. This process requires that we project our current tax liability and estimate our deferred tax assets and liabilities, including net operating loss and tax credit carryforwards. In assessing the need for a valuation allowance, we have considered our recent operating results, future taxable income projections and all prudent and feasible tax planning strategies. In 2007, we determined that it was more likely than not that we would realize the full value of our deferred tax assets and eliminated the remaining balance of our valuation allowance.

 

This excerpt taken from the PFWD 10-Q filed May 12, 2008.
Accounting for Income Taxes.   We are subject to income taxes in both the United States and foreign jurisdictions, and we use estimates in determining our provision for income taxes.  We account for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes, which is the asset and liability method for accounting and reporting for income taxes.  We adopted the provisions of FASB Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109, on January 1, 2007.  Under SFAS No. 109, deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and income tax bases of assets and liabilities using statutory rates. This process requires that we project our current tax liability and estimate our deferred tax assets and liabilities, including net operating loss and tax credit carryforwards. In assessing the need for a valuation allowance, we have considered our recent operating results, future taxable income projections and all prudent and feasible tax planning strategies. In 2007, we determined that it was more likely than not that we would realize the full value of our deferred tax assets and eliminated the remaining balance of our valuation allowance.

 

This excerpt taken from the PFWD 10-Q filed Nov 8, 2007.
Accounting for Income Taxes.   In connection with preparing our financial statements, we are required to compute income tax expense in each jurisdiction in which we operate. This process requires that we project our current tax liability and estimate our deferred tax assets and liabilities, including net operating loss and tax credit carryforwards. In assessing the need for a valuation allowance, we have considered our recent operating results, future taxable income projections and all prudent and feasible tax planning strategies. Based upon these projections, if it is determined that it is more likely than not that we would realize a portion of our deferred tax assets, we would recognize the benefit, through the release of the portion of the deferred tax asset valuation allowance, that we are reasonably confident will be utilized. In 2005, we determined that it was more likely than not that we would realize a portion of our deferred tax assets and therefore reduced the valuation allowance by $7.8 million in December 2005. This benefit of the release in valuation allowance was realized through reductions to income tax expense of $4.5 million and to goodwill of $3.2 million for the realization of acquired net operating loss carryforwards in the Clinsoft acquisition. In 2006, we determined that it was more likely than not that we would realize an additional portion of our deferred tax assets and therefore reduced the valuation allowance by $5.6 million. This benefit of the release in valuation allowance was realized through reductions to income tax expense of $5.4 million and to goodwill of $207,000. Also in 2006, we utilized $3.2 million of our deferred tax assets to offset 2006 taxable income. In the nine months ended September 30, 2007, we determined that it is more likely than not that we will realize an additional portion of deferred

 

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tax assets and therefore reduced the valuation allowance by $4.9 million. This benefit of the release in valuation allowance was realized through reductions to income tax expense of $4.4 million and to goodwill of $430,000.

 

If our current assumptions underlying the future taxable income projections and tax planning strategies do not turn out to be substantially accurate, the realization of our remaining deferred tax assets which are currently subject to a full valuation allowance could be accelerated, which would result in a reduction to income tax expense in the period when realization of this deferred tax asset is more likely than not to occur. However, this will be highly dependent upon our year-end projection of future income streams. After full realization of these benefits, we would expect our reported tax rate to revert to a more normal tax rate, in the range of 37% to 39%.

 

This excerpt taken from the PFWD 10-Q filed Aug 7, 2007.
Accounting for Income Taxes.    In connection with preparing our financial statements, we are required to compute income tax expense in each jurisdiction in which we operate. This process requires that we project our current tax liability and estimate our deferred tax assets and liabilities, including net operating loss and tax credit carryforwards. In assessing the need for a valuation allowance, we have considered our recent operating results, future taxable income projections and all prudent and feasible tax planning strategies. Based upon these projections, if it is determined that it is more likely than not that we would realize a portion of our deferred tax assets, we would recognize the benefit, through the release of the portion of the deferred tax asset valuation allowance, that we are reasonably confident will be utilized. In 2005, we determined that it was more likely than not that we would realize a portion of our deferred tax assets and therefore reduced the valuation allowance by $7.8 million in December 2005. This benefit of the release in valuation allowance was realized through reductions to income tax expense of $4.5 million and to goodwill of $3.2 million for the realization of acquired net operating loss carryforwards in the Clinsoft acquisition. In 2006, we determined that it was more likely than not that we would realize an additional portion of our deferred tax assets and therefore reduced the valuation allowance by $5.6 million. This benefit of the release in valuation allowance was realized through reductions to income tax expense of $5.4 million and to goodwill of $207,000. Also in 2006, we utilized $3.2 million of our deferred tax assets to offset 2006 taxable income. In the six months ended June 30, 2007, we determined that it is more likely than not that we will realize an additional portion of deferred tax assets and therefore reduced the valuation allowance by $2.8 million. This benefit of the release in valuation allowance was realized through reductions to income tax expense of $2.6 million and to goodwill of $192,000.

If our current assumptions underlying the future taxable income projections and tax planning strategies do not turn out to be substantially accurate, the realization of our remaining deferred tax assets which are currently subject to a full valuation allowance could be accelerated, which would result in a reduction to income tax expense in the period when realization of this deferred tax asset is more likely than not to occur. However, this will be highly dependent upon our year-end projection of future income streams. After full realization of these benefits, we would expect our reported tax rate to revert to a more normal tax rate, in the range of 35% to 39%.

This excerpt taken from the PFWD 10-Q filed May 3, 2007.
Accounting for Income Taxes.    In connection with preparing our financial statements, we are required to compute income tax expense in each jurisdiction in which we operate.  This process requires that we project our current tax liability and estimate our deferred tax assets and liabilities, including net operating loss and tax credit carryforwards.  In assessing the need for a valuation allowance, we have considered our recent operating results, future taxable income projections and all prudent and feasible tax planning strategies.  In 2005, we determined that it was more likely than not that we would realize a portion of our deferred tax assets and therefore reduced the valuation allowance by $7.8 million in December 2005.  This benefit of the release in valuation allowance was realized through reductions to income tax expense of $4.5 million and to goodwill of $3.2 million for the realization of acquired net operating loss carryforwards in the Clinsoft acquisition.  In 2006, we determined that it was more likely than not that we would realize an additional portion of our deferred tax assets and therefore reduced the valuation allowance by $5.6 million.  This benefit of the release in valuation allowance was realized through reductions to income tax expense of $5.4 million and to goodwill of $207,000.  Also in 2006, we utilized $3.2 million of our deferred tax assets to offset 2006 taxable income.  During the three months ending March 31, 2007, we determined that it is more likely than not that we will realize an additional portion of deferred tax assets and therefore reduced the valuation allowance by $1.2 million.  This benefit of the release in valuation allowance was realized through reductions to income tax expense of $1.1 million and to goodwill of $121,000.

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This excerpt taken from the PFWD 10-K filed Mar 1, 2007.
Accounting for Income Taxes.   In connection with preparing our financial statements, we are required to compute income tax expense in each jurisdiction in which we operate. This process requires that we project our current tax liability and estimate our deferred tax assets and liabilities, including net operating loss and tax credit carryforwards. In assessing the need for a valuation allowance, we have considered our recent operating results, future taxable income projections and all prudent and feasible tax planning strategies. In 2005, we determined that it was more likely than not that we would realize a portion of our deferred tax assets and therefore reduced the valuation allowance by $7.8 million in December 2005. This benefit of the release in valuation allowance was realized through reductions to income tax expense of $4.5 million and to goodwill of $3.2 million for the realization of acquired net operating loss carryforwards in the Clinsoft acquisition. In 2006, we determined that it was more likely than not that we would realize an additional portion of our deferred tax assets and therefore reduced the valuation allowance by $5.6 million. This benefit of the release in valuation allowance was realized through reductions to income tax expense of $5.4 million and to goodwill of $207,000. Also in 2006, we utilized $3.2 million of our deferred tax assets to offset 2006 taxable income.  The net effect of these changes resulted in a decrease to the valuation allowance of $2.4 million.

This excerpt taken from the PFWD 10-Q filed Nov 1, 2006.
Accounting for Income Taxes.    In connection with preparing our financial statements, we are required to estimate income tax expense in each jurisdiction in which we operate.  This process requires that we project our current tax liability and estimate our deferred tax assets and liabilities, including net operating loss and tax credit carryforwards.  In assessing the need for a valuation allowance, we have considered our recent operating results, future taxable income projections and all prudent and feasible tax planning strategies.  In the year ended December 31, 2005, we determined that it is more likely than not that we will realize a portion of our deferred tax assets and reduced the valuation allowance by $7.8 million in December 2005.  This benefit of the release in valuation allowance was realized through reductions to income tax expense of $4.5 million and to goodwill of $3.2 million.  During the three months and nine months ended September 30, 2006 the Company released a portion of its valuation allowance, resulting in a reduction in income tax expense of $857,000 and $2.3 million, respectively.

This excerpt taken from the PFWD 10-Q filed Aug 8, 2006.
Accounting for Income Taxes.    In connection with preparing our financial statements, we are required to estimate income tax expense in each jurisdiction in which we operate.  This process requires that we project our current tax liability and estimate our deferred tax assets and liabilities, including net operating loss and tax credit carryforwards.  In assessing the need for a valuation allowance, we have considered our recent operating results, future taxable income projections and all prudent and feasible tax planning strategies.  In the year ended December 31, 2005, we determined that it is more likely than not that we will realize a portion of our deferred tax assets and reduced the valuation allowance by $7.8 million in December 2005.  This benefit of the release in valuation allowance was realized through reductions to income tax expense of $4.5 million and to goodwill of $3.2 million.  During the three months and six months ended June 30, 2006 the Company released a portion of its valuation allowance, resulting in a reduction in income tax expense of $748,000 and $1.4 million, respectively.

This excerpt taken from the PFWD 10-Q filed May 10, 2006.
Accounting for Income Taxes.   In connection with preparing our financial statements, we are required to estimate income tax expense in each jurisdiction in which we operate. This process requires that we project our current tax liability and estimate our deferred tax assets and liabilities, including net operating loss and tax credit carryforwards. In assessing the need for a valuation allowance, we have considered our recent operating results, future taxable income projections and all prudent and feasible tax planning strategies. In the year ended December 31, 2005, we determined that it is more likely than not that we will realize a portion of our deferred tax assets and reduced the valuation allowance by $7.8 million in December 2005. This benefit of the release in valuation allowance was realized through reductions to income tax expense of $4.5 million and to goodwill of $3.2 million. During the three months ended March 31, 2006 the Company released a portion of its valuation allowance, resulting in a reduction in income tax expense of $700,000.

This excerpt taken from the PFWD 10-K filed Mar 13, 2006.
Accounting for Income Taxes.   In connection with preparing our financial statements, we are required to estimate income tax expense in each jurisdiction in which we operate. This process requires that we project our current tax liability and estimate our deferred tax assets and liabilities, including net operating loss and tax credit carryforwards. In assessing the need for a valuation allowance, we have considered our recent operating results, future taxable income projections and all prudent and feasible tax planning strategies. In the year ended December 31, 2004, due to the uncertainty in the ability to utilize net operating loss and tax credit carryforwards, we provided a full valuation allowance against our net deferred tax assets. In the year ended December 31, 2005, we determined that it is more likely than not that we will realize a portion of our deferred tax assets and reduced the valuation allowance by $7.8 million in December 2005. This benefit of the release in valuation allowance was realized through reductions to income tax expense of $4.5 million and to goodwill of $3.2 million.

The American Jobs Creation Act of 2004 (the “Act”) introduced a special one-time dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer (repatriation provision), provided certain criteria are met. On October 22, 2004, the Act was signed into law by the President. Even in light of the Act, our current intention is to reinvest the total amount of our un-remitted earnings in the local jurisdiction or to repatriate the earnings only when tax-effective. As such, we have not provided U.S. tax expense on the un-remitted earnings of our foreign subsidiaries.

This excerpt taken from the PFWD 10-Q filed Nov 14, 2005.
Accounting for Income Taxes. In connection with the preparation of our financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves the assessment of our net operating loss carryforwards and credits, as well as estimating the actual current tax liability together with assessing temporary differences resulting from differing treatment of items, such as reserves and accrued liabilities, for tax and accounting purposes. We then assess the likelihood that deferred tax assets will be recovered from future taxable income, and to the extent we believe that recovery is not likely, we must establish a valuation allowance. As of September 30, 2005, we have incurred a three year cumulative loss from operations. Once we are no longer in a three year cumulative loss position, we would expect to recognize some or all of our deferred tax assets based principally on our ability to forecast future operating income. Currently, we believe that it is more likely than not that we will not realize the value of our deferred tax assets and therefore have provided a full valuation allowance against our net deferred tax assets. We will continue to evaluate the realizability of our deferred tax assets quarterly. If in future periods our assessment deems it more likely than not the deferred tax assets will be recognized, we would record an adjustment to our valuation allowance at that time, which would result in a reduction to income tax expense, and such reduction could be significant in the period in which such determination is made.

 

The American Jobs Creation Act of 2004 (the “Act”), which was enacted on October 22, 2004, introduced a special one-time dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer (repatriation provision), provided certain criteria are met. Even in light of the Act, our current intention is to reinvest the total amount of our unremitted earnings in the local jurisdiction or to repatriate the earnings only when doing so would be tax-effective. As such, we have not provided U.S. tax expense on the unremitted earnings of our foreign subsidiaries.

 

This excerpt taken from the PFWD 10-Q filed Aug 10, 2005.
Accounting for Income Taxes.   In connection with the preparation of our financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves the assessment of our net operating loss carryforwards and credits, as well as estimating the actual current tax liability together with assessing temporary differences resulting from differing treatment of items, such as reserves and accrued liabilities, for tax and accounting purposes. We then assess the likelihood that deferred tax assets will be recovered from future taxable income, and to the extent we believe that recovery is not likely, we must establish a valuation allowance. As of June 30, 2005, we have incurred a three year cumulative loss from operations. Once we are no longer in a three year cumulative loss position, we would expect to recognize some or all of our deferred tax assets based principally on our ability to forecast future operating income. Currently, we believe that it is more likely than not that we will not realize the value of our deferred tax assets and therefore have provided a full valuation allowance against our net deferred tax assets. We will continue to evaluate the realizability of our deferred tax assets quarterly. If in future periods our assessment deems it more likely than not the deferred tax assets will be recognized, we would record an adjustment to our valuation allowance at that time, which would result in a reduction to income tax expense, which could be significant in the period in which such determination is made.

The American Jobs Creation Act of 2004 (the “Act”), which was enacted on October 22, 2004, introduced a special one-time dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer (repatriation provision), provided certain criteria are met. Even in light of the Act, our current intention is to reinvest the total amount of our unremitted earnings in the local jurisdiction or to repatriate the earnings only when doing so would be tax-effective. As such, we have not provided U.S. tax expense on the unremitted earnings of our foreign subsidiaries.

This excerpt taken from the PFWD 10-Q filed May 11, 2005.
Accounting for Income Taxes.   In connection with preparing our financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves the assessment of our net operating loss carryforwards and credits, as well as estimating the actual current tax liability together with assessing temporary differences resulting from differing treatment of items, such as reserves and accrued liabilities, for tax and accounting purposes. We then assess the likelihood that deferred tax assets will be recovered from future taxable income, and to the extent we believe that recovery is not likely, we must establish a valuation allowance. As of March 31, 2005, we have incurred a three year cumulative loss from operations. Once we are no longer in a three year cumulative loss position, we would expect to recognize some or all of our deferred tax assets based principally on our ability to forecast future operating income. Currently we believe that it is more likely than not that we will not realize the value of our deferred tax assets and therefore have provided a full valuation allowance against our net deferred tax assets.

The American Jobs Creation Act of 2004 (the “Act”), which was enacted on October 22, 2004, introduced a special one-time dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer (repatriation provision), provided certain criteria are met. Even in light of the Act, our current intention is to reinvest the total amount of our unremitted earnings in the local jurisdiction or to repatriate the earnings only when tax-effective. As such, we have not provided U.S. tax expense on the unremitted earnings of our foreign subsidiaries.

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