Abercrombie & Fitch 2009 Annual Report Download - page 75

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The effect of temporary differences which give rise to deferred income tax assets (liabilities) were as
follows (thousands):
2009 2008
Deferred tax assets:
Deferred compensation ................................. $ 48,476 $ 37,635
Rent............................................... 40,585 59,809
Accrued expenses ..................................... 15,464 17,023
Foreign net operating losses ............................. 11,329 1,692
Reserves ........................................... 8,757 11,020
Inventory ........................................... 7,829 10,347
Other .............................................. 2,223 —
Realized and unrealized investment losses ................... 1,152 560
Valuation allowance ................................... (1,369) (1,275)
Total deferred tax assets .............................. $134,446 $ 136,811
Deferred tax liabilities:
Store supplies........................................ (12,128) (12,844)
Property and equipment ................................ (127,983) (123,813)
Total deferred tax liabilities ............................ $(140,111) $(136,657)
Net deferred income tax (liabilities) assets . ................... $ (5,665) $ 154
Accumulated other comprehensive income is shown net of deferred tax assets and deferred tax liabilities,
resulting in a deferred tax asset of $4.6 million and $9.2 million for Fiscal 2009 and Fiscal 2008, respectively.
Accordingly, these deferred taxes are not reflected in the table above.
The Company has recorded a valuation allowance against the deferred tax assets arising from the net
operating loss of certain foreign subsidiaries and for realized and unrealized domestic operations’ investment
losses.
As of January 30, 2010 and January 31, 2009, the net operating foreign subsidiaries’ valuation allowance
totaled $0.2 million and $1.3 million, respectively. A portion of these net operating loss carryovers begin
expiring in Fiscal 2013 and some have an indefinite carry-forward period.
As of January 30, 2010, the valuation allowance for realized and unrealized investment losses totaled
approximately $1.1 million. Realized losses begin expiring in Fiscal 2011. There was no valuation allowance
as of January 31, 2009.
No other valuation allowances have been provided for deferred tax assets because management believes
that it is more likely than not that the full amount of the net deferred tax assets will be realized in the future.
74
ABERCROMBIE & FITCH CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)