Blackberry 2010 Annual Report Download - page 83

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Deferred income tax assets and liabilities consist of the following temporary differences:
February 27,
2010
February 28,
2009
As at
Assets
Non-deductible reserves ..................................................................................................... $ 190,491 $ 177,669
Tax loss carryforwards ....................................................................................................... 34,947 11,176
Unrealized losses on financial instruments .......................................................................... – 1,902
Other tax carryforwards ..................................................................................................... 12,892 3,972
Net deferred income tax assets.............................................................................................. 238,330 194,719
Liabilities
Capital assets .................................................................................................................... (161,707) (91,193)
Research and development ................................................................................................ (21,396) (20,283)
Unrealized gains on financial instruments ........................................................................... (17,367) –
Net deferred income tax liabilities .......................................................................................... (200,470) (111,476)
Net deferred income tax asset............................................................................................ $ 37,860 $ 83,243
Deferred income tax asset — current ...................................................................................... $ 193,916 $ 183,872
Deferred income tax liability — current ................................................................................... (14,674) (13,116)
Deferred income tax asset — long-term .................................................................................. – 404
Deferred income tax liability — long-term ............................................................................... (141,382) (87,917)
$ 37,860 $ 83,243
The Company determined that it is 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 as at February 27, 2010 (February 28, 2009- $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 income of its non-Canadian subsidiaries, as this income is intended to be reinvested indefinitely.
The Company’s total unrecognized income tax benefits as at February 27, 2010 and February 28, 2009 were $161.2 million
and $137.4 million respectively. The change in unrecognized income tax benefits during fiscal 2010 primarily relates to
changes in measurement of existing uncertain tax positions related to the foreign exchange. A reconciliation of the
beginning and ending amount of unrecognized income tax benefits that, if recognized, would affect the Company’s
effective tax rate is as follows:
(in millions)
Unrecognized income tax benefits balance as at February 28, 2009 .............................................................. $ 137.4
Foreign exchange .......................................................................................................................................... 35.8
Increase for tax positions of prior years ........................................................................................................ 4.2
Settlement of tax positions ............................................................................................................................ 0.0
Other ............................................................................................................................................................ (16.2)
Unrecognized income tax benefits balance as at February 27, 2010 ............................................................... $ 161.2
As at February 27, 2010, the total unrecognized income tax benefits of $161.2 million include approximately $118.1 million of
unrecognized income tax benefits that have been netted against related deferred income tax assets. The remaining
$43.1 million is recorded within current taxes payable and other non-current taxes payable on the Company’s consolidated
balance sheet as of February 27, 2010.
NOTE 10
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