Avon 2012 Annual Report Download - page 85

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Deferred tax assets (liabilities) resulting from temporary differences in the recognition of income and expense for tax and financial reporting
purposes at December 31 consisted of the following:
2012 2011
Deferred tax assets:
Accrued expenses and reserves $ 273.9 $ 261.5
Pension and postretirement benefits 195.6 166.0
Asset revaluations 39.4 39.5
Capitalized expenses 131.8 105.8
Intangible assets 142.3 74.7
Share-based compensation 62.2 54.9
Restructuring initiatives 26.4 18.0
Postemployment benefits 14.0 18.4
Tax loss carryforwards 648.3 576.8
Foreign tax credit carryforwards 356.0 282.1
Minimum tax and business credit carryforwards 47.5 47.0
All other 65.5 66.0
Valuation allowance (627.4) (546.1)
Total deferred tax assets 1,375.5 1,164.6
Deferred tax liabilities:
Depreciation and amortization (44.3) (48.6)
Unremitted foreign earnings (224.8) (46.8)
Prepaid expenses (10.0) (7.9)
Capitalized interest (10.2) (10.1)
All other (18.8) (16.5)
Total deferred tax liabilities (308.1) (129.9)
Net deferred tax assets $1,067.4 $1,034.7
Deferred tax assets (liabilities) at December 31 were classified as follows:
2012 2011
Deferred tax assets:
Prepaid expenses and other $ 273.5 $ 319.0
Other assets 827.2 759.5
Total deferred tax assets 1,100.7 1,078.5
Deferred tax liabilities:
Income taxes (6.1) (19.3)
Long-term income taxes (27.2) (24.5)
Total deferred tax liabilities (33.3) (43.8)
Net deferred tax assets $1,067.4 $1,034.7
The valuation allowance primarily represents amounts for foreign tax loss carryforwards. The basis used for recognition of deferred tax assets
included the profitability of the operations, related deferred tax liabilities and the likelihood of utilizing tax credit carryforwards during the
carryover periods. The net increase in the valuation allowance of $81.3 during 2012 was mainly due to several of our foreign entities
continuing to incur losses during 2012, thereby increasing the tax loss carryforwards for which a valuation allowance was provided.