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This excerpt taken from the WEN 10-K filed Mar 4, 2010. Income taxes
We record
income tax liabilities based on known obligations and estimates of potential
obligations. A deferred tax asset or liability is recognized whenever there are
future tax effects from temporary differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss, capital loss, and tax credit carryforwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to the years in which those differences are expected to be recovered or
settled. When considered necessary, we record a valuation allowance to reduce
the carrying amount of deferred tax assets if it is more likely than not all or
a portion of the asset will not be realized.
We apply
a recognition threshold and measurement attribute for financial statement
recognition and measurement of potential tax benefits associated with tax
positions taken or expected to be taken in income tax returns (“Uncertain Tax
Positions”). A two-step process of evaluating a tax position is
followed, whereby we first determine if it is more likely than not that a tax
position will be sustained upon examination, including resolution of any related
appeals or litigation processes, based on the technical merits of the
position. A tax position that meets the more-likely-than-not
recognition threshold is then measured for purposes of financial statement
recognition as the largest amount of benefit that is greater than 50 percent
likely of being realized upon being effectively settled. The
Company adopted this new accounting guidance related to Uncertain Tax Positions
on January 1, 2007. As a result of adoption, the Company recorded a
reduction of retained earnings of $2,275 as of the beginning of
2007.
Interest
accrued for Uncertain Tax Positions is charged to “Interest
expense.” Penalties accrued for Uncertain Tax Positions are charged
to “General and administrative.”
Wendy’s/Arby’s
files a consolidated Federal income tax return, which includes its principal
corporate subsidiaries. As a result of the Wendy’s Merger, which for
tax purposes was treated as a reverse acquisition, Wendy’s/Arby’s became part of
the Wendy’s consolidated group with Wendy’s/Arby’s as its new parent. As a
result, Wendy’s/Arby’s had a short taxable year in 2008 ending on the date of
the Wendy’s Merger.
- 74
-
WENDY’S/ARBY’S
GROUP, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(In
Thousands Except Per Share Amounts)
This excerpt taken from the WEN 10-K filed Feb 29, 2008. Income Taxes
Effective
January 1, 2007, the Company adopted FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes” (“FIN 48”). FIN 48 clarifies how
uncertainties in income taxes should be reflected in financial statements in
accordance with SFAS 109, “Accounting for Income Taxes.” FIN 48
prescribes a recognition threshold and measurement attribute for financial
statement recognition and measurement of potential tax benefits associated with
tax positions taken or expected to be taken in income tax
returns. FIN 48 prescribes a two-step process of evaluating a tax
position, whereby an entity first determines if it is more likely than not that
a tax position will be sustained upon examination, including resolution of any
related appeals or litigation processes, based on the technical merits of the
position. A tax position that meets the more-likely-than-not
recognition threshold is then measured for purposes of financial statement
recognition as the largest amount of benefit that is greater than 50 percent
likely of being realized upon being effectively settled.
Triarc
files a consolidated Federal income tax return, which includes its principal
corporate subsidiaries. The Company has provided for Federal income
taxes on the income of Deerfield through the date of the Deerfield Sale, and the
income of the Opportunities Fund and the DM Fund through their respective
effective redemption dates, net of minority interests since, as limited
liability companies (“LLC”), their income is includable in the Federal income
tax returns of its various members in proportion to their interests in the
LLC. Deferred income taxes are provided to recognize the tax effect
of temporary differences between the bases of assets and liabilities for tax and
financial statement purposes.
Interest
accrued for FIN 48 income
tax liabilities is charged to “Interest expense” in the Company’s consolidated
statements of operations. Penalties accrued for FIN 48 income tax liabilities
are charged to “General and administrative expense, excluding depreciation and
amortization” in the Company’s consolidated statements of
operations.
This excerpt taken from the WEN 10-K filed Mar 1, 2007. Income Taxes The Company files a consolidated Federal income tax return with all of its corporate subsidiaries. The Company provides or provided for Federal income taxes on the income of Deerfield, the Opportunities Fund and the DM Fund, net of minority interests since, as limited liability companies, their income is includable in the Federal income tax returns of its various members. Deferred income taxes are provided to recognize the tax effect of temporary differences between the bases of assets and liabilities for tax and financial statement purposes. Interest accrued for income tax contingencies is charged to “Interest expense” in the Company’s consolidated statements of operations. This excerpt taken from the WEN 8-K filed Oct 19, 2006. Income Taxes The Group is comprised of five companies (and their subsidiaries). Two of the companies are limited liability companies; accordingly, the tax attributes from the activities of those companies flow directly to the members of the limited liability companies. Thus, no tax provision, tax receivables or payables, or deferred tax assets or liabilities are reflected in the accompanying Combined Financial Statements related to these companies. Three companies are C Corporations; accordingly, the tax attributes from the activities of those companies are reflected in the accompanying Combined Financial Statements. Thus, tax provisions, tax receivables or payables, and deferred tax assets or liabilities arising from differences between the financial statement and tax basis of the assets and liabilities are reflected in the accompanying Combined Financial Statements related to these companies. Deferred taxes are provided 14
RTM Restaurant Group 2. Summary of Significant Accounting Policies—(continued) using currently enacted tax rates and regulation. A valuation allowance is provided for deferred tax assets for which realization is not deemed more likely than not. These excerpts taken from the WEN 10-K filed Apr 3, 2006. Income Taxes The Company uses the liability method of accounting for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Deferred income taxes are recognized based on the differences between the financial statement and income tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized (see Note 10). The Company uses the liability method of accounting for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” When the Company prepares its consolidated financial statements, it estimates income taxes based on the various jurisdictions where it conducts business. This requires the Company to estimate current tax exposure and to assess temporary differences that result from differing treatments of certain items for tax and accounting purposes. Deferred income taxes are recognized based on the differences between financial statement and income tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company then assesses the likelihood that deferred tax assets will be realized. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. When the Company establishes a valuation allowance or increases this allowance in an accounting period, it records a corresponding tax expense on the consolidated statement of operations. See Note 10 to the consolidated financial statements for further discussion of income taxes. Management must make significant judgments to determine the provision for income taxes, deferred tax assets and liabilities and any valuation allowance to be recorded against the net deferred tax asset. The Company net deferred tax asset as of December 31, 2005 was $2.0 million. The Company has not recorded a valuation allowance based on its estimates of taxable income for the jurisdictions in which it operates and the period over which the deferred tax assets will be realizable. While the Company has considered future taxable income in assessing the need for the valuation allowance, it could be required to increase the valuation allowance to take into account additional deferred tax assets that it may be unable to realize. An increase in the valuation allowance would have an adverse impact, which could be material, on the Company’s income tax provision and net income in the period in which it makes the increase.
54 Income Taxes The Company files a consolidated Federal income tax return with all of its subsidiaries except Deerfield, the Opportunities Fund and the DM Fund. The Company provides for Federal income taxes on the income of these entities net of minority interests since, as limited liability companies, their income is includable in the Federal income tax returns of its various members. Deferred income taxes are provided to recognize the tax effect of temporary differences between the bases of assets and liabilities for tax and financial statement purposes. This excerpt taken from the WEN 8-K filed Aug 26, 2005. 15. Income Taxes A reconciliation of income taxes from continuing operations to total income tax expense for the 40 weeks ended February 29, 2004 and March 6, 2005, respectively, follows:
The combined provision for income taxes differs from the amount of income tax determined by applying the U.S. statutory rate to pretax income principally as a result of state income taxes, employment tax credits, stock award compensation expense and income from nontaxable entities. Income (loss) from continuing operations would have been $(61) and $2,445 and the provision for income taxes from continuing operations would have been $904 and $4,069 for the 40 weeks ended February 29, 2004 and March 6, 2005, respectively, if the nontaxable entities had been subject to tax at the statutory federal income tax rate. Significant components of deferred tax assets and liabilities as of May 30, 2004 are as follows:
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