Ford 2014 Annual Report Download - page 165

FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 21. INCOME TAXES
We recognize income penalties in the Provision for/(Benefit from) income taxes on our consolidated
income statement. We recognize accrued interest expense related to unrecognized tax benefits in Automotive interest
income and other income/(loss), net and Financial Services other income/(loss), net on our consolidated income
statement.
Valuation of Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary
differences that exist between the financial statement carrying value of assets and liabilities and their respective tax
bases, and operating loss and tax credit carryforwards on a taxing jurisdiction basis. We measure deferred tax assets
and liabilities using enacted tax rates that will apply in the years in which we expect the temporary differences to be
recovered or paid.
Our accounting for deferred tax consequences represents our best estimate of the likely future tax consequences of
events that have been recognized on our financial statements or tax returns and their future probability. In assessing the
need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of
the deferred tax assets. If, based on the weight of available evidence, it is more likely than not that the deferred tax
assets will not be realized, we record a valuation allowance.
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