GameStop 2011 Annual Report Download - page 100

GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Differences between financial accounting principles and tax laws cause differences between the bases of
certain assets and liabilities for financial reporting purposes and tax purposes. The tax effects of these
differences, to the extent they are temporary, are recorded as deferred tax assets and liabilities and consisted of
the following components (in millions):
January 28,
2012
January 29,
2011
Deferred tax asset:
Inventory obsolescence reserve ................................. $ 18.8 $ 19.7
Deferred rents ............................................... 16.1 16.4
Stock-based compensation ..................................... 24.1 25.8
Net operating losses .......................................... 16.5 15.9
Customer liabilities ........................................... 29.4 9.0
Other ...................................................... 7.5 10.7
Total deferred tax assets ..................................... 112.4 97.5
Valuation allowance ........................................ (3.4) (2.7)
Total deferred tax assets, net .................................. 109.0 94.8
Deferred tax liabilities:
Fixed Assets ................................................ (25.2) (20.3)
Goodwill ................................................... (49.6) (44.5)
Prepaid expenses ............................................. (8.0) (7.5)
Acquired intangible assets ..................................... (41.7) (59.6)
Other ...................................................... (6.9) (9.0)
Total deferred tax liabilities .................................. (131.4) (140.9)
Net...................................................... $ (22.4) $ (46.1)
Financial statements:
Current deferred tax assets ....................................... $ 44.7 $ 28.8
Deferred tax liabilities .......................................... $ (67.1) $ (74.9)
In addition, the valuation allowance for deferred tax assets for the fiscal year ended January 30, 2010 was
$2.0 million.
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states
and foreign jurisdictions. The Internal Revenue Service (“IRS”) is currently examining the Company’s
U.S. income tax returns for the fiscal years ended on January 30, 2010, January 31, 2009, February 2, 2008 and
February 3, 2007. The Company does not anticipate any adjustments that would result in a material impact on its
consolidated financial statements as a result of these audits. The Company is no longer subject to U.S. federal
income tax examination for years before and including the fiscal year ended January 28, 2006.
With respect to state and local jurisdictions and countries outside of the United States, the Company and its
subsidiaries are typically subject to examination for three to six years after the income tax returns have been
filed. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of
tax, interest and penalties have been provided for in the accompanying financial statements for any adjustments
that might be incurred due to state, local or foreign audits.
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