IBM 1997 Annual Report Download - page 65

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notes to consolidated financial statements
International Business Machines Corporation
and Subsidiary Companies
63
The significant components of activities that gave rise to deferred tax assets and liabilities included on the balance
sheet were as follows:
Deferred Tax Assets
(Dollars in millions)
At December 31: 1997 1996
Employee benefits $3,707 $3,554
Capitalized research and development 1,196 1,478
Restructuring charges 1,163 1,323
Alternative minimum tax credits 1,092 1,016
Asset impairments 1,027 1,304
Deferred income 893 993
General business credits 492 452
Equity alliances 378 340
Intracompany sales and services 235 194
State and local tax loss carryforwards 203 166
Foreign tax loss carryforwards 202 368
Depreciation 132 123
Other 2,507 2,411
_________________ _________________
Gross deferred tax assets 13,227 13,722
Less: Valuation allowance 2,163 2,239
_________________ _________________
Net deferred tax assets $11,064 $11,483
Deferred Tax Liabilities
(Dollars in millions)
At December 31: 1997 1996
Sales-type leases $3,147 $3,126
Retirement benefits 2,147 1,967
Depreciation 1,556 1,702
Software costs deferred 420 648
Other 1,413 1,465
_________________ _________________
Gross deferred tax liabilities $8,683 $8,908
The estimated reversal periods for the largest deductible temporary differences are: employee benefits –1 to 30 years;
capitalized research and development –1 to 6 years; restructuring –1 to 5 years.
The valuation allowance applies to U.S. federal tax credits, state and local net deferred tax assets, and net operating
loss carryforwards that may expire before the company can utilize them.