Rogers 2008 Annual Report Download - page 103
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ROGERS COMMUNICATIONS INC. 2008 ANNUAL REPORT 99
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
realization criterion, a valuation allowance is recorded against the
future income tax assets.
The valuation allowance at December 31, 2008, includes $85 million
of foreign future income tax assets, $37 million relating to capital
loss carryforwards and $22 million relating to unrealized capital
losses on U.S. dollar-denominated debt and certain investments.
Income tax expense varies from the amounts that would be
computed by applying the statutory income tax rate to income
before income taxes for the following reasons:
In assessing the realizability of future income tax assets,
management considers whether it is more likely than not that
some portion or all of the future income tax assets will be realized.
The ultimate realization of future income tax assets is dependent
upon the generation of future taxable income during the years
in which the temporary differences are deductible. Management
considers the scheduled reversals of future income tax liabilities,
the character of the future income tax assets and available tax
planning strategies in making this assessment.
To the extent that management believes that the realization of
future income tax assets does not meet the more likely than not
7. INCOME TAXES
2008 2007
Future income tax assets:
Non-capital income tax loss carryforwards $ 377 $ 680
Capital loss carryforwards 37 16
Deductions relating to long-term debt and other transactions denominated in foreign currencies 39 100
Investments 13 –
PP&E and inventory – 11
Liability for stock-based compensation 81 148
Ontario harmonization credit 65 –
Other deductible differences 149 131
Total future income tax assets 761 1,086
Less valuation allowance 144 119
617 967
Future income tax liabilities:
PP&E and inventory (126) –
Investments – (6)
Goodwill and intangible assets (367) (441)
Other taxable differences (22) (30)
Total future income tax liabilities (515) (477)
Net future income tax asset 102 490
Less current portion 446 594
Long-term future income tax liabilities $ (344) $ (104)
2008 2007
Statutory income tax rate 32.7% 35.2%
Computed income tax expense $ 466 $ 312
Increase (decrease) in income taxes resulting from:
Difference between rates applicable to subsidiaries (2) (12)
Change in valuation allowance 19 (20)
Vidéotron termination payment – (25)
Effect of tax rate changes (33) 47
Stock-based compensation 5 (17)
Ontario harmonization credit (65) –
Impairment losses on goodwill and intangible assets not deductible for tax 51 –
Benefits relating to changes to prior year tax filing positions and other items (17) (36)
Income tax expense $ 424 $ 249
The income tax effects of temporary differences that give rise to
significant portions of future income tax assets and liabilities are
as follows: