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22
INOTERA MEMORIES, INC.
NOTES TO FINANCIAL STATEMENTS
The components of deferred income tax expense for the years ended December 31, 2008, 2009 and 2010, were as follows:
(Continued)
For years ended December 31,
2008
2009
2010
Investment tax credit
$
(1,861,024
)
6,582,547
(272,860
)
Loss carry forward
(3,935,252
)
(2,636,759
)
(2,008,726
)
Decrease (increase) in allowance for inventory devaluation
and obsolescence
(213,487
)
353,537
(131,509
)
Allowance for doubtful accounts
(821,287
)
13,580
90,066
Valuation (gain) loss on financial instruments
(170,145
)
(4,046
)
75,567
Accumulated impairment loss of idle and fixed assets
4,117
3,300
(38,966
)
Unrealized depreciation for tax filing -
(211,635
)
190,663
Unrealized interest expenses -
(58,365
)
58,365
Allowance for valuation of deferred tax assets
7,306,292
(5,380,766
)
1,035,022
Decrease in unrealized foreign exchange gain or loss
(309,523
)
168,375
148,655
Unallocated overhead and labor -
-
(48,177
)
Deferred income tax effect of change in income tax rate -
1,150,951
900,476
Others
3,631
1,976
1,424
Deferred income tax expense
$
3,322
(17,305
)
-
(b)
The income tax expense calculated at a statutory income tax rate on loss before income tax was reconciled with the income
tax as reported in the accompanying financial statements for the years ended December 31, 2008, 2009 and 2010, as follows:
For years ended December31,
2008
2009
2010
Income tax calculated based on pretax financial loss
$
(5,441,951
)
(2,869,232
)
(1,812,423
)
Expiry (increase in) of income tax credit on purchase
of machinery and equipment
(1,944,441
)
6,582,547
(272,860
)
Difference between estimated and actually reported income
tax expense
1,944
110
7
(Decrease) increase in valuation allowance for deferred income tax assets
7,306,292
(5,380,766
)
1,035,022
Effect of changes in income tax rate -
1,743,461
1,046,077
10% surtax on undistributed earnings
83,417
Prior year income tax adjustment
2,826
(76,196
)
4,064
Others
5
76
113
Income tax expense
$
8,092
-
-