Dell 2010 Annual Report Download - page 100
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Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
including expectation of future taxable income, Dell has provided a valuation allowance of $48 million and $41 million for Fiscal 2011
and Fiscal 2010, respectively, related to state income credit carryforwards. Dell has provided a valuation allowance of $20 million and
$22 million related to net operating losses for Fiscal 2011 and Fiscal 2010, respectively. Additionally, for Fiscal 2011, a $4 million
valuation allowance has been provided against other deferred tax assets. Dell has determined that it will be able to realize the remainder
of its deferred tax assets.
The components of Dell's net deferred tax assets are as follows:
January 28, January 29,
2011 2010
(in millions)
Deferred tax assets:
Deferred revenue $ 369 $ 499
Warranty provisions 214 124
Provisions for product returns and doubtful accounts 77 60
Leasing and financing 91 191
Credit carryforwards 54 51
Loss carryforwards 201 173
Stock-based and deferred compensation 203 225
Operating and compensation related accruals 62 50
Capitalized intangible assets 55 56
Other 50 56
Deferred tax assets 1,376 1,485
Valuation allowance (72) (63)
Deferred tax assets, net of valuation allowance 1,304 1,422
Deferred tax liabilities:
Property and equipment (144) (142)
Acquired intangibles (511) (534)
Other (16) (65)
Deferred tax liabilities (671) (741)
Net deferred tax asset $ 633 $ 681
Current portion (included in other current assets) $ 558 $ 444
Non-current portion (included in other non-current assets) 75 237
Net deferred tax asset $ 633 $ 681
During Fiscal 2011, Dell recorded $41 million of deferred tax assets related to net operating loss and credit carryforwards acquired during
the year, all of which was offset to goodwill. During Fiscal 2010, Dell recorded $26 million of deferred tax assets related to acquired net
operating loss and credit carryforwards, net of valuation allowances of $17 million. The offset for recording the acquired net operating
loss and credit carryforwards was $9 million to goodwill. During Fiscal 2011 and Fiscal 2010, $21 million and $20 million, respectively,
were recorded to additional paid in capital related to the utilization of acquired net operating losses as a result of employee stock option
activity, and is included in net tax shortfall from employee stock plans on the Consolidated Statement of Stockholders' Equity. Utilization
of the acquired carryforwards is subject to limitations due to ownership changes that may delay the utilization of a portion of the acquired
carryforwards. No additional valuation
96