Creative 2000 Annual Report Download - page 36

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36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 – INCOME TAXES (Cont’d)
Deferred tax assets at June 30, 2000 and 1999 consisted of the following (in US$’000):
As of June 30
2000 1999
Non-deductible reserves $ 22,346 $ 13,313
Net operating loss carryforwards 10,444 14,333
Other 2,608 2,617
Total deferred tax assets 35,398 30,263
Valuation allowance for deferred tax assets (35,398) (30,263)
$ – $ –
Creative has United States tax deductions not included in the net operating loss carryforwards described above aggregating
approximately $38.5 million at June 30, 2000, as a result of the exercise of employee stock options, the tax benefit of which
has not been realized. The tax benefit of the deductions, when realized, will be accounted for as a credit to additional paid-
in capital rather than a reduction of the income tax provision.
At June 30, 2000, Creative had Irish and US net operating loss carryforwards of approximately $33.0 million and $15.2
million, respectively. The Irish net operating losses have an indefinite carryforward period while the US net operating losses
expire in 2005 to 2019. The utilization of these net operating losses by Creative is subject to certain conditions.
A full valuation allowance has been recorded for Creative’s deferred tax assets at June 30, 2000 and 1999 as management
believes sufficient uncertainty exists regarding the realizability of these assets.