Rosetta Stone 2015 Annual Report Download - page 96
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Table of Contents
The components of loss before income taxes and the provision for taxes on income consist of the following (in thousands):
United States
$ (41,458)
$ (60,434)
$ (14,360)
Foreign
(4,179)
(19,761)
(3,658)
Loss before income taxes
$ (45,637)
$ (80,195)
$ (18,018)
The provision for taxes on income consists of the following (in thousands):
Federal
$ (157)
$ 29
$ 155
State
96
23
123
Foreign
444
1,258
1,709
Total current
$ 383
$ 1,310
$ 1,987
Deferred:
Federal
$ 1,148
$ (5,425)
$ (3,972)
State
169
(797)
(112)
Foreign
(541)
(1,577)
213
Total deferred
776
(7,799)
(3,871)
Provision (benefit) for income taxes
$ 1,159
$ (6,489)
$ (1,884)
Reconciliation of income tax provision (benefit) computed at the U.S. federal statutory rate to income tax expense (benefit) is as follows (in thousands):
Income tax benefit at statutory federal rate
$ (15,973)
$ (28,068)
$ (6,306)
State income tax expense, net of federal income tax effect
231
(782)
7
Acquired intangibles
—
—
(859)
Nondeductible goodwill impairment
1,961
—
—
Other nondeductible expenses
88
482
1,105
Tax rate differential on foreign operations
(1,019)
276
(264)
Increase in valuation allowance
15,713
21,772
4,263
Tax audit settlements
(96)
—
—
Change in prior year estimates
225
(69)
(17)
Other tax credits
29
(102)
—
Other
—
2
187
Income tax expense (benefit)
$ 1,159
$ (6,489)
$ (1,884)
The Company accounts for uncertainty in income taxes under ASC topic 740-10-25, ("ASC 740-10-25"). ASC
740-10-25 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. ASC 740-10-25 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition.
The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense (benefit). As of
December 31, 2015 and 2014, the Company had zero and $26,000 accrued for interest and penalties, respectively, in "Other Long Term Liabilities". During
the years ended December 31, 2015 and 2014, the Company accrued zero and $10,000 in interest expense, respectively.
F-40