DuPont 2006 Annual Report Download - page 84

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Deferred income taxes result from temporary differences between the financial and tax basis of the company’s
assets and liabilities. The tax effects of temporary differences and tax loss/tax credit carryforwards/backs
included in the deferred income tax provision are as follows:
2006 2005 2004
Depreciation $ (12) $ (3) $ (203)
Accrued employee benefits (125) 405 189
Other accrued expenses (329) 31 165
Inventories (52) (46) (33)
Unrealized exchange (loss) gain (62) 41 (72)
Investment in subsidiaries and affiliates 7(7) 275
Amortization of intangibles (14) (45) (111)
Other temporary differences 92 71 (108)
Tax loss/tax credit carryforwards/backs 65 (230) (1,129)
Valuation allowance, net (185) (108) 606
$(615) $ 109 $ (421)
The significant components of deferred tax assets and liabilities at December 31, 2006 and 2005, are as
follows:
Asset Liability Asset Liability
2006 2005
Depreciation $ — $1,380 $ — $1,337
Accrued employee benefits
1
2,190 137 2,281 1,203
Other accrued expenses 2,639 2,194 585 47
Inventories 169 49 184 113
Unrealized exchange gains 43 — 120
Tax loss/tax credit carryforwards/backs 2,506 — 2,420 —
Investment in subsidiaries and affiliates 31 337 — 318
Amortization of intangibles 75 661 84 670
Other 348 206 332 96
$ 8,001 $4,964 $ 5,887 $3,804
Valuation allowance
1
(1,259) (1,363)
$ 6,742 $ 4,524
1Includes an increase in deferred tax assets of $98 and a decrease in deferred tax liabilities of $750 at December 31, 2006 due to the
initial application SFAS 158. No incremental valuation allowance at December 31, 2006 resulted from the initial application of
SFAS 158.
Current deferred tax assets of $656 and $820 at December 31, 2006 and 2005, respectively, are included in the
caption Income taxes within Current assets of the Consolidated Balance Sheets. In addition, Deferred tax
assets of $1,430 and $1,137 are included in Other assets at December 31, 2006, and 2005, respectively. See
Note 14. Deferred tax liabilities of $39 and $58 at December 31, 2006, and 2005, respectively, are included in
the caption Income taxes within Current liabilities of the Consolidated Balance Sheets.
F-21
E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)