Huntington National Bank 2005 Annual Report Download - page 36

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MANAGEMENT’S DISCUSSION AND ANALYSIS HUNTINGTON BANCSHARES INCORPORATED
the Notes to Consolidated Financial Statements contains an analysis of the impact to the fair value of MSRs resulting from
changes in the estimates used by Management.
–I
NCOME
T
AXES
— The calculation of our periodic provision for income taxes is complex and requires the use of estimates and
judgments. We have two accruals for income taxes: our accrued income taxes represent the net estimated amount currently due
or to be received from taxing jurisdictions, including any reserve for potential examination issues, and is reported as a
component of ‘‘accrued expenses and other liabilities’’ in our consolidated balance sheet; and our deferred income tax liability
represents the estimated impact of temporary differences between how we recognize our assets and liabilities under GAAP, and
how such assets and liabilities are recognized under the federal tax code.
From time to time, we engage in business transactions that may have an effect on our tax liabilities. Where appropriate, we
have obtained opinions of outside experts and have assessed the relative merits and risks of the appropriate tax treatment of
business transactions taking into account statutory, judicial, and regulatory guidance in the context of our tax position.
However, changes to our estimates of accrued taxes can occur due to changes in tax rates, implementation of new business
strategies, resolution of issues with taxing authorities regarding previously taken tax positions and newly enacted statutory,
judicial, and regulatory guidance. Such changes could affect the amount of our accrued taxes and could be material to our
results of operations.
34