Callaway 2013 Annual Report Download - page 95

F-25
Deferred tax assets and liabilities are classified as current or noncurrent according to the classification of the
related asset or liability. Significant components of the Company’s deferred tax assets and liabilities as of
December 31, 2013 and 2012 are as follows (in thousands):
December 31,
2013 2012
Deferred tax assets:
Reserves and allowances not currently deductible for tax purposes .................................... $ 16,953 $ 15,617
Basis difference related to fixed assets................................................................................. 13,137 10,711
Compensation and benefits................................................................................................... 6,878 3,808
Basis difference for inventory valuation............................................................................... 1,593 2,502
Compensatory stock options and rights................................................................................ 3,925 5,238
Deferred revenue and other .................................................................................................. 459 101
Operating loss carryforwards................................................................................................ 94,639 105,748
Tax credit carryforwards....................................................................................................... 11,584 6,024
Correlative effects of global income allocations .................................................................. — 363
Federal impact of state taxes................................................................................................. — 808
Basis difference related to intangible assets with a definite life........................................... 18,363 6,165
Total deferred tax assets............................................................................................................... 167,531 157,085
Valuation allowance for deferred tax assets................................................................................. (158,747)(151,097)
Deferred tax assets, net of valuation allowance........................................................................... $ 8,784 $ 5,988
Deferred tax liabilities:
State taxes, net of federal income tax benefit ....................................................................... 1 (33)
Prepaid expenses................................................................................................................... (970)(1,102)
Deferred revenue .................................................................................................................. — (330)
Other ..................................................................................................................................... (84)(69)
Basis difference related to intangible assets with an indefinite life...................................... (34,284)(32,834)
Total deferred tax liabilities......................................................................................................... (35,337)(34,368)
Net deferred tax liabilities............................................................................................................ $(26,553)$
(28,380)
Net deferred tax assets (liabilities) are shown on the accompanying consolidated balance
sheets as follows:
Current deferred tax assets.................................................................................................... $ 6,419 $ 4,170
Non-current deferred tax assets ............................................................................................ 2,299 1,910
Current deferred tax liabilities .............................................................................................. — (927)
Non-current deferred tax liabilities....................................................................................... (35,271)(33,533)
Net deferred tax liabilities............................................................................................................ $(26,553)$
(28,380)
The current year change in net deferred taxes of $1,827,000 is comprised of a net deferred expense of $548,000
related to the change in the basis difference of intangible assets with an indefinite life, a net deferred expense of $1,912,000
related to foreign and separate state jurisdictions for which no valuation allowance has been provided, and a $633,000
benefit related to foreign currency translation adjustments.
Deferred tax assets and liabilities result from temporary differences between the financial reporting and tax bases
of assets and liabilities and are measured using the enacted tax rates and laws that are anticipated to be in effect at the
time the differences are expected to reverse. The realization of the deferred tax assets, including the loss and credit carry
forwards listed above, is subject to the Company generating sufficient taxable income during the periods in which the
temporary differences become realizable. In accordance with the applicable accounting rules, the Company maintains a
valuation allowance for a deferred tax asset when it is deemed to be more likely than not that some or all of the deferred
tax assets will not be realized. In evaluating whether a valuation allowance is required under such rules, the Company
considers all available positive and negative evidence, including prior operating results, the nature and reason for any
losses, its forecast of future taxable income, and the dates on which any deferred tax assets are expected to expire. These