Buffalo Wild Wings 2015 Annual Report Download - page 57

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57
Deferred income taxes are provided for temporary differences between the basis of assets and liabilities for financial
reporting purposes and income tax purposes. Deferred tax assets and liabilities as of December 28, 2014, were classified as
current and noncurrent on the basis of the classification of the related asset or liability for financial reporting. In November
2015, the FASB issued ASU 2015-17 “Income Taxes.” ASU 2015-17 requires that deferred income tax liabilities and assets
be classified as non-current in a statement of financial position. The Company elected early adoption of this guidance for the
fiscal year ended December 27, 2015, on a prospective basis. The adoption of this ASU allows the Company to simplify its
presentation of deferred income tax liabilities and assets. Prior periods were not retrospectively adjusted. Temporary
differences comprising the net deferred tax assets and liabilities on the accompanying consolidated balance sheets are as
follows:
December 27,
2015 December 28,
2014
Deferred tax assets:
Unearned revenue $ 4,386 3,101
Accrued compensation and benefits 5,339 4,805
Deferred lease credits 15,718 14,524
Stock-based compensation 4,030 5,010
Advertising costs 3,159 1,806
Insurance reserves 1,349 3,696
Capital lease and deemed landlord financing 14,659
Foreign NOL/Other 6,248 6,028
Other 8,190 5,523
Total $ 63,078 44,493
Deferred tax liabilities:
Depreciation $ 69,002 55,177
Goodwill and other amortization 8,098 2,089
Prepaid expenses 1,398 2,120
Accrued bonus 2,058 3,087
Future taxes on foreign earnings 6,248 6,028
Total $ 86,804 68,501
Net deferred tax liability $ 23,726 $ 24,008
A valuation allowance is established when it is more likely than not that some portion of the deferred tax assets will
not be realized. Realization is dependent upon the generation of future taxable income or the reversal of deferred tax
liabilities during the periods in which those temporary differences become deductible. We consider the reversal of deferred
tax liabilities, projected future taxable income and tax planning strategies. Since we believe sufficient future taxable income
will be generated to utilize the benefits of the deferred tax assets, a valuation allowance has not been recognized. Our foreign
net operating losses, foreign tax credits, and state tax credits begin expiring in 2030, 2023, and 2024, respectively.
The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits:
Fiscal Years Ended
December 27,
2015 December 28,
2014
Beginning of year $ 598 $ 825
Additions based on tax positions related to the current year 476 229
Additions (reductions) based on tax positions related to prior years 108 (30)
Reductions based on settlements with tax authorities (6)(187)
Reductions based on expiration of statute of limitations (48)(239)
End of year $ 1,128 $ 598