Blackberry 2008 Annual Report Download - page 69

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67
Deferred income tax assets and liabilities consist of the
following temporary differences:
As at
March 1,
2008 March 3,
2007
Assets
Financing costs $ 49 $ 3,077
Non-deductible reserves 102,737 41,917
Tax loss carryforwards 18,245 18,669
Unrealized losses on financial instruments -2,712
Other tax carryforwards 198 1,187
Net deferred income tax assets 121,229 67,562
Liabilities
Capital assets 68,140 63,408
Unrealized gains on financial instruments 11,383 -
Research and development 11,468 26,723
Net deferred income tax liabilities 90,991 90,131
Net deferred income tax asset (liability) $ 30,238 $ (22,569)
Deferred income tax asset - current $ 90,750 $ 21,624
Deferred income tax asset - long term 4,546 8,339
Deferred income tax liability - long-term (65,058) (52,532)
$ 30,238 $ (22,569)
The Company determined that it was more likely than not that
it can realize its deferred income tax assets. Accordingly, no
valuation allowance is required on its deferred income tax assets
(March 3, 2007 - $nil). The Company will continue to evaluate and
examine the valuation allowance on a regular basis and when
required, the valuation allowance may be adjusted.
The Company has not provided for Canadian deferred
income taxes or foreign withholding taxes that would apply on
the distribution of the earnings of its non-Canadian subsidiaries,
as these earnings are intended to be reinvested indefinitely.
The Company adopted the provisions of FIN 48 Accounting for
Uncertainty in Income Taxes at the beginning of fiscal 2008 (“the
adoption date”). The Company’s total unrecognized tax benefits
as at the adoption date and March 1, 2008 were $152.7 million
and $175.4 million respectively. The change in unrecognized tax
benefits during fiscal 2008 relates to a $33.4 million increase due
to changes in measurement of existing uncertain tax positions
related to the appreciation of the Canadian dollar versus U.S.
dollar, enacted tax rate changes and other measurement criteria,
offset by a $10.7 million decrease regarding the settlement during
the third quarter of the fiscal 2008 of an unrecognized tax benefit
related to ITCs on research and development expenditures. A
reconciliation of the beginning and end amount of unrecognized
tax benefits is as follows:
(in millions)
Unrecognized tax benefits balance as at March 4, 2007 $ 152.7
Gross increase for tax positions of prior years 6.3
Settlement of tax positions (10.7)
Foreign exchange 32.7
Other (5.6)
Unrecognized tax benefits balance as at March 1, 2008 $ 175.4