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Table of Contents
NetSpend Holdings, Inc.
Notes to Consolidated Financial Statements (Continued)
December 31, 2008, 2009 and 2010
NOTE 15: INCOME TAXES (Continued)
Deferred income tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred
taxes as of December 31, 2009 and 2010 are as follows:
Deferred tax assets at December 31, 2010, were reduced by a valuation allowance relating to the unrealized loss on a long-term
investment. Due to the fact that this loss is capital in nature and could only be utilized to offset future capital gains, the Company does not
believe that it is more likely than not that the benefit of that asset would be realized in the foreseeable future. The Company will continue to
assess the potential realization of this asset and will adjust the valuation allowance in future periods as appropriate.
Upon the tax-free acquisition of Skylight in 2008, the Company purchased federal net operating losses and credits, which were subject to
use limitations under provisions of the Internal Revenue Code.
96
December 31,
2009 2010
(in thousands of dollars)
Deferred tax assets
Current deferred tax assets
Deferred revenue
$
727
$
1,223
Accrued expenses
2,100
2,522
Prepaid card supply costs
30
161
Net operating loss and tax credit
carryforwards
15
10
Total current deferred tax assets
2,872
3,916
Non
-
current deferred tax assets
Accrued expenses
65
72
Net operating loss and tax credit
carryforwards
471
230
Unrealized loss on long-term
investment
—
413
Stock compensation
1,091
2,575
Gross non
-
current deferred tax assets
1,627
3,290
Valuation allowance
—
(
413
)
Total non
-
current deferred tax assets
1,627
2,877
Deferred tax liabilities
Non
-
current deferred tax liabilities
Acquired intangibles
(10,356
)
(9,278
)
Depreciation and amortization
(1,589
)
(3,454
)
Total non-current deferred tax
liabilities
(11,945
)
(12,732
)
Net current deferred tax asset
2,872
3,916
Net non
-
current deferred tax liability
$
(10,318
)
$
(9,855
)