Zynga 2014 Annual Report Download - page 100

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Table of Contents
Pursuant to authoritative guidance, the benefit of stock options will only be recorded to stockholders’ equity when cash taxes payable is
reduced. When realized, the amount of net operating loss carryforward that will be recognized as a benefit to additional paid in capital is
approximately $470.3 million. The federal and state net operating loss carryforwards are subject to various annual limitations under Section 382
of the Internal Revenue Code.
As of December 31, 2014, the Company had approximately $140.9 million in total unrecognized tax benefits. A reconciliation of the
beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
If the $140.9 million of unrecognized tax benefits as of December 31, 2014 is recognized, approximately $10.2 million would impact the
effective tax rate in the period in which the benefits are recognized. The remaining amount would be offset by the reversal of related deferred tax
assets on which a valuation allowance is placed. The Company does not expect any material changes to its unrecognized tax benefits within the
next twelve months.
We classify uncertain tax positions as non-current income tax liabilities unless expected to be paid within one year or otherwise directly
related to an existing deferred tax asset, in which case the uncertain tax position is recorded net of the asset on the balance sheet. We recognize
interest and penalties in income tax expense. As of December 31, 2014 and December 31, 2013, the total balance of accrued interest and
penalties related to uncertain tax positions was $0.7 million and $0.5 million, respectively.
We file income tax returns in the U.S. federal jurisdiction as well as many U.S. states and certain foreign jurisdictions. The material
jurisdictions in which we are subject to potential examination include the United States, United Kingdom, and Ireland. We are subject to
examination in these jurisdictions for all years since our inception in 2007. Fiscal years outside the normal statute of limitation remain open to
audit by tax authorities due to tax attributes generated in those early years which have been carried forward and may be audited in subsequent
years when utilized.
97
December 31, 2011
$
48,334
Additions based on tax positions related to 2012
51,222
Reductions for tax positions of prior years
(835
)
December 31, 2012
98,721
Additions based on tax positions related to 2013
16,414
Additions for tax positions of prior years
18,356
December 31, 2013
133,491
Additions based on tax positions related to 2014
7,738
Additions for tax positions of prior years
171
Reductions for tax positions of prior years
(511
)
December 31, 2014
$
140,889