Creative 2006 Annual Report Download - page 9
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ACCOUNTINGFORINCOMETAXES
Inpreparingitsfinancialstatements,Creativeestimatesitsincometaxesforeachofthejurisdictionsinwhichitoperates.This
involvesestimatingtheactualcurrenttaxexposureandassessingtemporarydifferencesresultingfromdifferingtreatmentofitems,
suchasreservesandaccruals fortaxandaccountingpurposes.Thesedifferences resultindeferredtaxassetsandliabilities,
whichareincludedwithinCreative’sconsolidatedbalancesheet.Significantmanagementjudgementisrequiredindetermining
theprovisionforincometaxes,deferredtaxassetsandliabilitiesandfuturetaxableincomeforpurposesofassessingtheability
torealizeanyfuturebenefitfromitsdeferredtaxassets.Creativeprovidesforavaluationallowancewithregardtoitsdeferred
taxassetsasmanagementbelievesthatasubstantialuncertaintyexistsregardingtherealizabilityoftheseassets.