Twenty-First Century Fox 2011 Annual Report Download - page 81

Notes to the Consolidated Financial Statements (continued)
The following is a summary of the components of the deferred tax accounts:
2011 2010
As of June 30, (in millions)
Deferred tax assets:
Net operating loss carryforwards $ 318 $ 394
Capital loss carryforwards 1,421 1,237
Prior year tax credit carryforwards 695 739
Accrued liabilities 669 624
Total deferred tax assets 3,103 2,994
Deferred tax liabilities:
Basis difference and amortization (3,960) (3,727)
Revenue recognition (280) (271)
Sports rights contracts (131) (185)
Other (277) (65)
Total deferred tax liabilities (4,648) (4,248)
Net deferred tax liabilities before valuation allowance (1,545) (1,254)
Less: valuation allowance (2,009) (2,089)
Net deferred tax liabilities $(3,554) $(3,343)
The Company had net current deferred tax assets of $8 million and $2 million at June 30, 2011 and June 30, 2010, respectively, and
noncurrent deferred tax assets of $150 million and $141 million at June 30, 2011 and 2010, respectively. The Company also had non-current
deferred tax liabilities of $3,712 million and $3,486 million at June 30, 2011 and 2010, respectively.
At June 30, 2011, the Company had approximately $794 million of net operating loss carryforwards available to offset future taxable income.
The majority of these net operating loss carryforwards have an unlimited carryforward period. In accordance with our accounting policy,
valuation allowances of $78 million and $143 million have been established to reflect the expected realization of these net operating loss
carryforwards as of June 30, 2011 and 2010, respectively.
At June 30, 2011, the Company had approximately $4.4 billion of capital loss carryforwards available to offset future taxable income having
no expiration. In accordance with our accounting policy, valuation allowances of $1.2 billion and $1.2 billion have been established to reflect the
expected realization of these capital loss carryforwards as of June 30, 2011 and 2010, respectively.
At June 30, 2011, the Company has approximately $695 million of tax credit carryovers available to offset future income tax expense. This
amount resulted from the Company’s election to credit certain prior year taxes instead of claiming deductions. If these credits are not utilized to
offset future U.S. income tax expense, the credits will expire starting in the June 30, 2014 fiscal year through the fiscal year June 30, 2021. In
accordance with our accounting policy, valuation allowances of $695 million and $739 million have been established to reflect the expected
realization of these tax credit carryovers as of June 30, 2011 and 2010, respectively.
The following table sets forth the change in the accrual for uncertain tax positions, excluding interest and penalties:
2011 2010
For the year ended June 30, (in millions)
Balance, beginning of period $243 $ 458
Additions for prior year tax positions 46 15
Reduction for prior year tax positions (33) (230)
Balance, end of period $256 $ 243
During the fiscal year ended June 30, 2011, the Company has reduced its accrual for uncertain tax positions by $33 million. During the fiscal
year ended June 30, 2010, the Company has reduced its accrual for uncertain tax positions by $230 million primarily to reflect the Company’s
election to credit certain prior year’s taxes instead of claiming deductions. The Company recognizes interest and penalty charges related to
unrecognized tax benefits as income tax expense, which is consistent with the recognition in prior reporting periods. The Company had recorded
liabilities for accrued interest of $43 million and $49 million as of June 30, 2011 and 2010, respectively.
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